DMAI's budget proposal for the year 2012-2013

15 Feb '12

5 min read

b) Presently, audit is compulsory if the turnover exceeds Rs.40.00 lacs. This should be increased to at least Rs.5 crores commensurate with depreciation of rupee value. Further, Income Tax for partnership firms from the present level of 30% for small firms having annual income of less than Rs.5.00 lacs should be reduced as under.

TDS on interest should be increased to Rs.20,000/- from the present Rs.10,000/- for Bank deposits and others to Rs.10,000/- from Rs.5,000/-

D. GENERAL

i) At present, Sec. 57A of the Companies Act puts a lot of restrictions on companies borrowing from directors, friends, relatives and employees. Small scale industries are exempted from this section provided :-

- Their share capital is below Rs.25 lacs

- Borrowings from non-members do not exceed Rs.20 lacs

- No. of members (Shareholders) does not exceed 50

They recommend that SSI should continue to enjoy exemption from Sec. 57A of the Companies Act, but the limits should be suitably revised upward as under:

- Share capital not to exceed Rs.1.50 crores

- Borrowings from friends, relatives not to exceed Rs.50 lacs

- Number of members (Shareholders permitted) – 75

ii) Amend Sec. 57A of Companies Act

For the convenience of carrying on day today business, it becomes necessary to do inter- company transactions between two related companies. For example in case of import of goods in order to reduce transaction cost, many a times one company does a combined import and then transfer part of it to another company and also in case of some urgent requirements, one company buys from another company, which has ready stock of the same. At present, if any one or both company's paid up share capital of Rs.1 crore or more, Central Govt. permission is required to be taken, which is a lengthy and cumbersome procedure. We suggest that the paid up share capital be increased to Rs.5 crores in view of the depreciation of the currency on account of inflation over the years.

iii) Synthetic food colors are merely dyestuffs, which are presently classified under Ch.28 as edible food preparation. Food colors must be restored to Chapter 32.04 under S.O. Dyes. This amendment should be made applicable to both Excise as well as Customs Departments.

iv) Presently, a penalty of Rs.10/- per day U/S 69A is levied under Partnership Firms Act without any upper limit. We, therefore, suggest that a maximum of Rs.5000/- should be levied, which would help SMEs to a great extent in case of any delay in notification to the Registrar of Partnership Firm in the matter of change of Partnership due to oversight or otherwise.

The Dyestuffs Manufacturers' Association of India, popularly known as DMAI was set up in 1950, (Manufacture of dyes in India was started in 1940), to promote and protect trade, commerce & Industries connected with dyestuffs & to encourage friendly feelings & unanimity amongst those engaged in the manufacture of dyestuffs in India.

The Dyestuffs Manufacturers' Association of India (DMAI)

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