Tag: Tax

GST council may lower tax rate on high collections: Reports

GST council may lower tax rate on high collections: Reports

05/09/2017 12:04

A Government Official has said that the GST Council may consider lowering tax on items of common consumption if the high trajectory of collections continues over the next few months.

Commenting on the issue, a Government Official told the media, “The first-month collection under the new Goods and Services Tax (GST) regime has been encouraging and if the rising trend continues till December, it would make a case for reduction of tax rate.”

“The tax reduction could be either on items of common consumption or a cut in headline rate which will benefit consumers,” he added.

As per reports, India’s maiden GST revenue mop-up got off to a strong start with collection of Rs 92,283 crore in July from just 64.42 per cent of the total taxpayer base. Of this, as much as Rs 14,894 crore has come in from the Central GST (CGST), Rs 22,722 crore from State GST (SGST), Rs 47,469 crore from Integrated GST (IGST) and Rs 7,198 crore from compensation cess levied on demerit and luxury goods.

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Tax burden on gold should reduce under GST regime: WGC

Tax burden on gold should reduce under GST regime: WGC

25/05/2017 17:17

The World Gold Council today urged the government to reduce the tax incidence on gold and gold products under the new Goods and Sevices Tax regime.

“In the GST regime, we urge and expect that the total tax burden on gold be halved from the current level of around 12 per cent,” WGC managing director Somasundaram PR said here today during launch of a new comprehensive India gold report in Bengali.

The report is published after 15 years and is also available in English, Hindi, Malayam and Tamil for a ready reference to Indian gold industry.

Currently, total taxation comes to between 12 and 13 per cent. Custom duty is 10 per cent, excise is one per cent and VAT of 1-1.5 per cent depending upon states.

“In the GST regime, we demand the total tax burden on gold to be not more than 6-7 per cent. But, we have to wait for a few days more when the GST rates on gold is expected to be announced,” Somasundaram said.

He tried to convince that gold import was not as bad as was perceived to be when asked why government should offer low tax on gold which is an idle asset and contribute a lot for current account deficit.

“According to a 2014-15 report of PWC, value addition in gold is to the tune of USD 30 billion with a lot more scope. Gold loan is also to the tune of around USD 10 billion with about 1,250 tonne as collateral allowing persons access to credit be it formal or informal,” Somasundaram said.

Hoping GST will bring lot of transperency in the gold industry including check on illgeal imports which is about 120 tonnes a year now. But it will take few months industry to get stabilised, the WGC official said.

Somasundaram said government should promote gold investment through ETF with tax breaks rather than physical gold.

He reteriated that the country needed a gold policy that would help all stakeholders.

Meanwhile, the gold demand during Q1 (January-March, 2017) grew by 15 per cent to 123 tonnes, but it was 18 per cent down compared to the corresponding period in the last five years on average.

Will request FM to reduce tax rate on hybrid vehicles: Gadkari

25/05/2017 15:45

Union Minister Nitin Gadkari today said that he will urge Finance Minister Arun Jaitley to bring down GST rate on hybrid vehicles and other automobiles that run on alternate fuels.

Under the GST rates announced last week, hybrid cars, which are considered eco-friendly, are slated to attract a 15 per cent cess over and above peak rate of 28 per cent, same as those of large luxury cars and SUVs.

The automobile industry has expressed concern on the high rate on hybrids stating it would put a spanner in the wheels of government plans to promote green vehicles.

At present hybrid vehicles attracts excise duty of 12.5 per cent with an effective overall tax rate of 30.3 per cent.

“I will be meeting Arun Jaitley soon to request that tax slabs for vehicles run on ethanol, bio diesel, bio CNG should be reduced. I will also request him to reduce tax rate on hybrid vehicles in order to tackle air pollution in the long run,” Road Transport and Highways Minister Nitin Gadkari told PTI in an interaction.

The minister, who also holds Shipping portfolio, said the government’s policy is to promote electric mobility in the country. GST rate on electric vehicles has been kept at 12 per cent.

“It is our policy to encourage electric cars and buses. Shortly, I will be coming out a policy regarding this. Hybrid cars should also be encouraged, it saves fuel,” he said.

Electric and hybrid vehicles along with alternate fuels like ethanol should be encouraged in order to reduce India’s import of crude oil.

“We import crude worth Rs 7 lakh crore. Electric, ethanol, bio diesel, bio CNG these are import substitutes and are cost effective, pollution free and indigenous too,” Gadkari said.

If such vehicles are encouraged on a large scale, the cost will also come down, he added.

Auto industry is also planning to take up the matter of higher tax rate on hybrid vehicles with the Finance Ministry this week.

Some of the popular hybrid vehicles sold in India are Camry Hybrid and Prius from Toyota and Honda Accord. These cars are priced between Rs 31.98 lakh and Rs 38.96 lakh.

A host of other companies were also planning to foray into the segment.

GST execution from July 1 a challenge for industry: Assocham

GST execution from July 1 a challenge for industry: Assocham

24/05/2017 16:34

Implementing GST from July 1 will be a challenge for the industry and the government should consider relaxing penal provisions for a couple of quarters to help it comply with the new tax regime, Assocham said today.

The government is working overtime to roll out the goods and services tax regime from July 1 and has held several workshops and seminars to familiarise traders and the industry about the new indirect taxation structure.

“Implementing GST from July 1 will definitely be a challenge for the industry… There could be people making genuine mistakes. I would say the department should be softer in the first quarter or two because it is going to be a learning process,” Assocham President Sandeep Jajodia told PTI in an interview.

He sought relaxation on imposition of penal provisions for at least a quarter or two, if not the whole year.

The GST law provides for as many as 21 kinds of penalties for various offences. Short payment will attract a penalty of 10 per cent of the tax due subject to a minimum of Rs 10,000. For various other errors, the penalty would be 10 per cent of the tax due.

On the impact of GST on the steel sector, Jajodia, also the CMD of Monnet Ispat and Energy Limited, said: “I don’t think there will be much (difference). There are no negatives at all for sure and there could be some positives because the raw material pricing, ores and coal have come down.”

However, the Assocham president said GST will provide a huge fillip to the industry in the medium to long term as the tax compliance at present is “quite tedious”.

Budget not transformative, focuses on reducing demonetization pain: Ind-Ra

Budget not transformative, focuses on reducing demonetization pain: Ind-Ra

02/02/2017 15:57

The broad theme of the FY18 budget remains on reducing the pain arising out of demonetization and continuity of focusing on infrastructure and housing, says India Ratings and Research (India Ratings).

The fiscal deficit target at 3.2 per cent of GDP in FY18 is lower than expected and positive for money markets, this will ensure transmission of low rates and benefits to the banking sector, said the rating agency.

Higher MNREGA spending than was budgeted in FY17 budget and increasing allocation to Rs 480 billion aimed at reducing the demonetization pain. This could be seen from the focus areas of the budget on agriculture/rural, MSME/informal sector and people who are in the lower income bracket.

The budget pegs 2016-17 (revised estimates) fiscal and revenue deficit at 3.2 per cent and 2.1 per cent of GDP respectively. The same for 2017-18 are pegged at 3.2 per cent and 1.9 per cent respectively. This shows some improvement in the quality of deficit, which is a welcome step and soothes, the nerves of the debt market.

Central government’s net tax revenues are expected to grow at 12.7 per cent in 2017-18 (2016-17: 15.4%) translating in a net tax revenue buoyancy of marginally higher than 1. Aggregate net tax collection assumptions appear to be plausible, however, at sectoral level it appears to be slightly difficult. For the banking sector, the budget reinforced Ind-Ra’s thesis on rationing of growth capital for PSU banks, while keeping the option of providing bailout capital open. Modest growth target for agri lending also points to the fact that Govt. is cognizant and comfortable with PSU banks’ inability to grow at a rapid pace. Ind-Ra expects this to keep the demand for Additional Tier-1 bonds high even in FY18.

Affordable housing has been given infrastructure status enhancing funding access as well as reducing borrowing costs, pace of lending through NHB continues , eligibility parameters on tax benefits for developers have been expanded and higher spends are being directed through PM Awas Yojna.

Tax incentives to corporates to cost Rs 83,492 cr in FY17: Reports

Tax incentives to corporates to cost Rs 83,492 cr in FY17: Reports

02/02/2017 10:31

The Indian Government’s revenue foregone in the form of incentives to corporates in the current fiscal is estimated to grow nearly 8.63 per cent to over Rs 83,492 crore, said media reports.

As per the Budget document 2017-18, the revenue foregone stood at Rs 76,857.70 crore in the 2015-16 fiscal.

As per the budget document, revenue foregone on account of deduction of export profits of units located in SEZs (section 10A and 10AA) is estimated at Rs 20,492 crore in the current fiscal year.

Revenue foregone on deduction of profits of undertakings engaged in generation, transmission and distribution of power would be Rs 12,401.04 crore in 2016-17 compared to Rs 11,416 crore in the last fiscal year, the document said.

According to the Budget document, revenue impact of major tax incentives for corporate tax payers during the financial year 2016-17 is based on the corporate returns filed up to November 30, 2016, which constitute 90 per cent of the expected returns in the financial year.

Sushil Chandra appointed as CBDT chief

Sushil Chandra appointed as CBDT chief

06/10/2016 11:26

Senior Indian Revenue Service officer Sushil Chandra has been appointed as chairperson of the Central Board of Direct Taxes (CBDT), the apex policy making body for the Income Tax department.

He will replace Rani Singh Nair, who retires this month-end.

Chandra, a 1980 batch officer of Indian Revenue Service (Income Tax cadre), is currently Member (Investigation) of the CBDT.

The Appointments Committee of the Cabinet approved the appointment of Chandra as Chairperson of the CBDT to replace Nair, who is superannuating on October 31, an order issued by Department of Personnel and Training said.

IIT graduate Chandra’s tenure will last till May next year, official sources said.

Nair, a 1979 batch IRS officer, had taken over as CBDT chief on August 1 this year, said the media report.

The CBDT is headed by a chairman and can have a maximum of six members.

Govt’s tax kitty swells to Rs 4.3 lakh cr in Apr-July

10/08/2016 16:12

Reflecting an upturn in economic activity, government’s revenue collection showed an impressive growth in April-July period of this fiscal, with total direct and indirect tax mop-up rising to Rs 4.3 lakh crore, reported PTI.

Indirect tax collections rose by 29.9 per cent during the first four months of the current fiscal to about Rs 2.71 lakh crore, mainly on account of 50.8 per cent jump in excise revenues.

Direct tax revenue rose 24.01 per cent to Rs 1.59 lakh crore in April-July, driven mainly by higher mop-up in personal income tax due to early advance tax collections.

The indirect and direct tax collections till July account for 34.90 per cent and 18.82 per cent of the annual budget target, respectively.

The government hopes to collect Rs 8.47 lakh crore from direct taxes and Rs 7.79 lakh crore from indirect taxes, which includes customs, excise and service tax, in 2016-17 fiscal.

Personal income tax collection grew 31.47 per cent while corporate taxes registered an increase of 11.65 per cent, an official statement said.

After accounting for refunds, the net growth in personal income tax stood at 46.55 per cent, while for corporate tax it was 2.84 per cent.

Regarding indirect taxes, excise collection in the first four months of current fiscal grew 50.8 per cent to Rs 1.23 lakh crore. Service tax revenue increased by 25.8 per cent to Rs 76,679 crore.

Customs revenue collection during April-July 2016 registered 7.9 per cent growth at Rs 71,767 crore.

Govt forms committee to examine India-Mauritius DTA issues

Govt forms committee to examine India-Mauritius DTA issues

14/06/2016 10:49

Government of India has constituted a working group to examine the consequential issues arising out of amendments to India-Mauritius Double Taxation Avoidance (DTA) agreement and related issues, as per the government release.

The working group is headed by Joint Secretary (FT&TR-II), CBDT and comprising of departmental officers and representatives of SEBI, custodians, brokerage firms and fund managers, added the release.

Moreover, the working group will submit its report to the CBDT within 3 months, after examining the relevant issues.

‘Indian economy making good progress to return to 8% growth’

‘Indian economy making good progress to return to 8% growth’

02/06/2016 00:21

With the Indian economy growing by 7.9 per cent in the first quarter of the 2015-16 fiscal, a top Indian planner said that the country was making “good” progress to return to the average GDP growth rate of eight per cent recorded between 2003 and 2011, reported PTI.

“Today, there is a good bit of turnaround” in the economy which was not in a “great shape” when the Narendra Modi government came into power in 2014, NITI Aayog Vice Chairman Arvind Panagariya said at a discussion organised by the Asia Society Policy Institute on the two years of the Modi government.

He said for the 2015-16 year, the Indian economy grew by 7.6 per cent and in the last quarter of the fiscal, the growth rate was 7.9 per cent, reported PTI.

Panagariya said he had been saying that the economic growth could touch 8 per cent by the time the 2015-16 fiscal year ended and the 7.9 per cent growth achieved is “pretty good outcome from that perspective.”

He noted that inflation has been contained around five per cent and forex reserves are also in good shape.

“Some of the outcome-related symptoms, related largely to the stabilisation of the economy are beginning to look good,” he said addressing the discussion attended by analysts, executives and diplomats including India’s Consul General in New York Riva Ganguly Das, Deputy Permanent Representative to the UN Tanmaya Lal, former Indian envoy to the UN Hardeep Singh Puri and former US Ambassador to India Frank Wisner.

Panagariya said the “economy is returning to its original path of growth. From 2003-04 to 2011-12 the average growth rate had been 8.3 per cent. I think the economy really needs to return to that level. So far the progress looks generally good.”

He, however, added that there are certain “continuing weaknesses” which are largely inherited.

He cited the example of the steel, construction, textile and banking sectors, saying all of these have “serious legacy issues but it should not distract us from the fact that several of the sectors” such as auto, pharma, software, engineering goods, are “doing well which is what accounts for the aggregate growth of 7.6 per cent.”

He stressed that lot of changes have happened on the policy front, lamenting that many of them have not been recognised.

“There is a lag between the policy action taking place and the outcomes being impacted. It is the fact that policy actions have happened and are continuing to happen and the fact that there is some lag makes me quite optimistic about the growth rate going forward returning to eight per cent plus,” he added.

Panagariya outlined the various measures being taken by the government to boost investment and growth in sectors like infrastructure, including in highways, railways as well as in the innovation, entrepreneurs and energy sectors.

On reforms, he said there has been an end to the bureaucratic paralysis and a “major assault on the inspector Raj.”

He noted that 1178 redundant laws have been repealed and there have been “no allegations of high-level corruption in the two years” of the government.

Panagariya said the Goods and Services Tax is in the works and several major reforms have taken place in the labour laws through the states.

He said the “very important reform” of strategic sales or privatisation is back on the government’s agenda.

He said NITI Aayog is “very much right now” in the middle of identifying the public sector units that ought to be privatised.

“Very soon we will have at least our first list sent out,” he said.

On taxation, he said there have been no new cases of retrospective taxation.

He added that medical and higher education reforms “is also very much on the anvil.