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The corrugated box chronicles: part II

The corrugated box chronicles: part II
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First Published: Wed, Mar 02 2011. 11 04 PM IST
Updated: Wed, Mar 02 2011. 11 04 PM IST
Remember those corrugated boxes on which the finance minister so thoughtfully reduced excise duty in his 2010 budget as part of his vision of an India marching ahead into the 21st century with corrugated boxes, latex threads and toy balloons? Well, after the recent budget, I was desultorily going through the Explanatory Memorandum, muttering to myself about the things one had to do to make a living when, lo and behold, what do I find tucked away unobtrusively in a quiet corner of the fine print but, guess what? Corrugated boxes again. Yes, sir, there it was, in black and white, in Section A (VIII) (2):“Concessional rate of 5% excise duty is being extended to corrugated boxes whether or not pasted with Duplex sheet on their outer surface”.
I realize what must have happened. When the corrugated box manufacturers went happily to the excise duty office to collect their refunds, their respective corrugated boxes under their arms, some pesky inspector must have pointed to the corrugated box pasted with a Duplex sheet on its outer surface and nastily said it wasn’t a corrugated box at all. The manufacturer of the corrugated box with a Duplex sheet must then have been thrown out of the building, into the dark abyss populated by lesser breeds who make uncorrugated boxes. Naturally, he made a beeline to Pranab Uncle, pouring out his woes into his receptive ears. What, you make corrugated boxes with Duplex sheets on their inner surface? Tough luck, friend, maybe you’ll get the concession next year.
What does the finance minister see in corrugated boxes? Well, Imelda Marcos collected shoes, Mayawati collects statues and garlands made of thousand rupee notes, Advaniji collects frequent Rath Yatri miles and Pranab Mukherjee probably has a thing about corrugated boxes.
It would be wrong, of course, to say that man lives by corrugated boxes alone—there are other important things in the budget that merit equal attention. It’s true that the excise duty on “sugar confectionary, pastries and cakes” has been raised from 4% to 5%. But it’s still a concessional rate. What’s more, he has given full exemption from excise duty to air conditioning equipment for installation of cold chain infrastructure for apiaries, which means we’ll get more and better honey. And excise duty on diapers has been reduced to a mere 1%. As the astute reader will no doubt have figured out, there’s a pattern in targeting items such as confectionary, cakes, honey and diapers. They’re all aimed at babies. Put that together with the excise concessions granted to toy balloons last year and Pranab babu’s far-sighted strategy becomes crystal clear. He’s aiming to please the youngest generation so that, a couple of decades from now when they trudge to the polling booths, they will gratefully remember that concession on diapers that Pranab Uncle gave them and vote the Congress.
You don’t believe me? Let me provide some clinching evidence. Go to the customs duty section of the Explanatory Memorandum and you will find that the duty on import of “sun-dried dark seedless raisins”, always a big hit with kids, has been lowered from 100% to 30%. Add to that the concessional excise duty on sanitary napkins and the raising of the income-tax exemption limit for senior citizens and he also has the female and geriatric vote banks in the bag. Incidentally, the tax exemptions for super seniors is not, as Pranab pointed out, for his own benefit. Instead, it’s a generous peace offering, a masterstroke, intended primarily for the benefit of Mr Lal Krishna Advani.
It would be churlish, however, to leave out the finance minister’s attempt at more transparency. At several places in the Memorandum, he says that provisions “are being redrafted to make them more lucid and coherent”. However, he has a long way to go, as seen from this little extract: “Under the existing provisions of section 143 (1B) of the Income-tax Act, the Central Government may, for the purpose of giving effect to the scheme made under section 143 (1A), by notification in the Official Gazette, direct that any of the provisions of the Income-tax Act relating to processing of returns shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in that notification.”
By the way, what exactly does the finance minister have against lilies? In the finance bill, he says, in his inimitable way, “In heading 0603 after tariff item 0603 14 00 and the entries relating thereto, the following shall be inserted, namely, Lilies”. Being an erudite man, he is of course aware of the Biblical injunction, “Consider the lilies of the field, how they grow, they toil not, neither do they spin. And yet I say unto you that even Solomon in all his glory was not arrayed like one of these.” Clearly, lilies are a corrupting influence, distracting people from their tasks of toiling and spinning. They are best kept out by high tariffs.
And finally, I come to the piece de resistance of the finance minister’s proposals. Hidden away right at the end of the Explanatory Memorandum is a small item that says, “Point of Taxation Rules, 2011”. For this after all is the nub, the crux, the very centre piece of the Budget. It probably gives us the answer to the burning question we ask whenever we pay taxes. For with crumbling roads, erratic power and water supply, hospitals that are death traps, schools that don’t teach and a venal and inept administration, what indeed is the point of taxation?
Manas Chakravarty looks at trends and issues in the financial markets. Comment at capitalaccount@livemint.com
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First Published: Wed, Mar 02 2011. 11 04 PM IST