(A) Reasons for making amendment
Section 44AE, inter alia provides that, the profits and gains shall be deemed to be an amount equal to Rs. 7,500 per month or part of a month for each goods carriage or the amount claimed to be actually earned by the assessee, whichever is higher.
The current presumptive income scheme is applicable uniformly to all classes of goods carriages irrespective of their tonnage capacity. The only condition which needs to be fulfilled is that the assessee should not have owned more than 10 goods carriages at any time during the previous year. Accordingly, the transporters who owns (less than 10) large capacity/size goods carriages are also availing the benefit of section 44AE. It is necessary to mention here that the legislative intent of introducing this provision was to give benefit to small transporters in order to reduce their compliance burden. Even though the profit margins of large capacity goods carriages are higher than small capacity goods carriages, the tax consequences are similar which is against the principle of tax equity. In view of the above amendment in section 44AE has been made.
(B) Amendment made
In the case of heavy goods vehicle (more than 12MT gross vehicle weight), the presumptive income would deemed to be an amount equal to Rs. 1,000 per ton of gross vehicle weight or unladen weight, as the case may be, for every month or part of a month during which the heavy goods vehicle is owned by the assessee in the previous year or an amount claimed to have been actually earned from such vehicle, whichever is higher.
The vehicles other than heavy goods vehicle will continue to be taxed as per the existing rates of Rs. 7,500 per month or part of a month for each goods carriage or the amount claimed to be actually earned by the assessee, whichever is higher.
For this purpose, “heavy goods vehicle” means any goods carriage the gross vehicle weight of which exceeds 12,000 kilograms.