Repudiation of fiscal panels – by ankit bhatia

Bonjour !!

Yet another ‘good evening’ to fellow esteemed, relentlessly intrigued intellectual strata & alumni – who are perpetually soliciting & craving for intellectual stimulation & seeking excursions into the profound zones of fiscal or legal horizons !


Invariably, I have perceived the esteemed ‘member columns’ as conferment of a perpetual privilege, upon the columnist, to co-embark on an intellectually stimulating journey – & intrigue esteemed fellow intellectual strata, induce deliberation and pondering over policy framework developments, to proliferate macro and micro fiscal developments, perturbations, & for self-enlightenment, soliciting rebuttals from my esteemed fellow strata – which is consequently induced by perpetual craving for intellectually stimulating excursions !

Eureka! Eureka !!

Its rather ubiquitous nowadays – while perusing member columns – to discover even ‘philosophical’ member columns too – in startling contrast to erstwhile pervasive exclusivity of fiscal or legal columns😉


Well .. despondency could be the apt solitary – to encapsulate – what the overall prominent fiscal advisory factions, expert panels, industry bodies – have been pervaded with – in context of consistent fiscal policy framework recommendations – attributable to conferment or otherwise – of fiscal immunity upon certain sectors of the economy !

Indian fiscal formulation framework’s relentless & perpetual pursuit – in adherence to flawed, misconceived postulations – regarding certain specific sectors (whether political strategy or inadvertent) – has, invariably, been grossly perplexing and grossly defiant – in reference to fiscal jurisprudence principles !!

Instance of an entrenched, though misplaced & flawed, fiscal postulation – across policy formulation systems – enshrined – commencing – within the holy statutory framework itself – via – Finance Act / legal framework itself[commencing via Section 10(1) read with Section 2(1A)], & subsequently proliferated and descended via subsidiary fiscal legislationsbestowing absolute immunity & vulnerable status – in unequivocal terms, and a sort of economic disdain attitude – towards economic potentiality across cosmic agri sector – in reference to fiscal jurisprudence principles framework –tantamount to nothing but a fallacious, naive & regressive view – especially in deficit ridden economies!


Such flawed, misplaced postulations have persisted – usurping and repudiating multiple panel representations, multiple expert advisory committee opinions – having subscribed to the contrary view – disapproving conferment of fiscal immunity to cosmic agri sector!

Subsequent to the aforesaid scope, now, the misconceived immunity seems even further dispersed – whereby said immunity being bestowed – in context of other fiscal-legal framework too.

Relevant extracts of pertinent statutory circular extending the scope of immunity :

It has come to the notice of the Board that certain field formations have taken a view that ..only the activity in so far it relates to actual testing has been exempted in the Negative List..

  1. 2.         The matter has been examined. In this regard, Negative list entry under Clause (d) of section 66D of the Finance Act, 1994 is reproduced as under :

“(d) services relating to agriculture or agricultural produce by way of(i) agricultural operations directly related to production of any agricultural produce including cultivation, harvesting, threshing, plant protection or testing;2.1       Term ‘agriculture ‘ has been defined under section 65B clause (3) as under..2.2       Term ‘agriculture produce ‘ has been defined under section 65B clause (5)..2.3     ..All services relating to agriculture by way of agriculture operations directly relating to production of agriculture produce including testing is covered. Testing and certification can be done as per the Act and rules made there under in this regard. .. Therefore, all processes are  a part of the composite process and cannot be separated from testing.2.4       “Agricultural operations” have not been defined in the Chapter V of the Finance Act, 1994 and an inclusive and indicative list of such operations has been given. Thus it has been defined as “Agricultural operations directly related to production of any agricultural produce including cultivation, harvesting, threshing, plant protection or testing”. The exemption is thus not limited to the  specified operations....4.         In view of the above, it is clarified that all testing and ancillary activities .. are covered within the meaning of ‘testing’ as mentioned in sub-clause (i) of clause (d) of section 66D .. Therefore, such services are not liable ..under section 66B ..      

Another pertinent extract seeking rebuttal of aforesaid flawed postulations & reiterating the rational assertion by multiple fiscal committees – regarding fiscal framework:

What isn’t quite as well known is that of more than 400,000 ..claiming exemption – the biggest were seed giant Kxx Seeds – it claimed Rs 186.63 crore (Rs 1.87 billion) exemption .. and multinational Mxx India, which claimed Rs 94.40 crore (Rs 944 million) as exemption..

More pertinent extracts – attributable to Industry panel recommendations :

Dhoot said .. additional revenue of Rs 20,000 crore every year.For 2011-12 fiscal, the government had estimated a deficit of Rs 4.12 lakh crore, or 4.6 per cent of GDP.However, the fiscal deficit is expected to exceed the target due to rise in subsidies and lower revenue growth.According to the (CGA) data, the government’s fiscal deficit went up to Rs 3.53 lakh crore or 85.6 per cent of the Budget estimates at the end of November 2011 as the growth of non-tax revenue slowed down.The Finance Minister had said that India’s subsidy billis likely to increase by about Rs 1 lakh crore, over and above the outlay of Rs 1.34 lakh crore estimated in the Budget for 2010-11, mainly on account of higher outlays for oil, food and fertilisers.

However, despite all the aforesaid facts, panel reports extracts, jurisprudence and panel or industry panel recommendations, the policy formulation systems, though fiscally or rationally inconceivable, have been persisting in adherence to repudiation – towards the industry bodies, expert panels recommendations – all of which unanimously & vehemently recommend – being averse to – conferment of absolute immunity on the sector !!


Such flawed adherence & consequent repudiation, consequently, seem to pervade the industry and expert factions – with a sense of despondency – towards fiscal rationale, economic repercussions of flawed policies, consequent enhanced fiscal encumbrances, consequent impediments in industry growth or impact on disposable resources of specific markets and so on.

Let optimism prevail ..