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Taxation

Current Affairs

Taxation Laws (Amendment) Bill, 2019

  • Passed in Lok Sabha
  • Passed in Rajya Sabha
  • Replacement of an ordinance promulgated
  • Domestic companies: 22% tax (if they dont claim certain deductions)
  • Requirement of this law: US-China trade war

Highlights Of The Ordinance And The Bill

  • Currently, domestic companies with annual turnover of up to Rs 400 crore pay income tax at the rate of 25%. For other domestic companies, the tax rate is 30%. The Bill provides domestic companies with an option to pay tax at the rate of 22%, provided they do not claim certain deductions under the Income Tax Act.
  • The Bill provides new domestic manufacturing companies with an option to pay income tax at the rate of 15%, provided they do not claim certain deductions. These new domestic manufacturing companies must be set up and registered after September 30, 2019, and start manufacturing before April 1, 2023.

Direct Tax Collections

  • Direct tax collections, net of refunds, for the April-November period grew just 6% against the required rate of 17.4% to achieve the budget estimate of Rs 13.35 lakh crore for the current fiscal.
  • In the first eight months of the fiscal, the government collected Rs 5.56 lakh crore in direct taxes compared with Rs 5.48 lakh crore in the same period in FY19.
  • The income tax department has processed refunds worth Rs 1.46 lakh crore till November 28, up 23% compared with the same period a year ago.

DBT-Direct Benefit Transfer

  • 7 years ago direct benefit transfer was launched on a pilot basis.
  • Initially it was a pilot project of Planning Commission in 20 districts
  • The DBT mechanism was steadily expanded to cover ever more government welfare schemes.
  • DBT is supposed to bring efficiency, effectiveness, transparency and accountability in the government’s welfare and payments system.

At present: there are 436 schemes across 56 ministries which use DBT.

  • The cumulative payments to date are about 9 trillion.
  • Annual number of transactions this year itself are more than 3 billion.
  • Assuming a poverty rate of 25% for the country, it means more than 10 bank transactions per man, woman and child living in poverty.
  • DBT is a grand success and is the largest such electronic payment system in the world.
  • The government claims that cumulatively till March 2019, it had saved ₹4 trillion due to DBT.

Goods and Services Tax (GST)

  • After two months of contraction, GST revenue grew 6% in November 2019.
  • 3rd largest monthly mop-up of Rs 1.03 lakh crore since the tax’s launch in July 2017.
  • November collections on domestic transactions witnessed a 12% rise while those on imports declined 13%.
  • September GST collections: Rs 91,916 crore
  • 19-month low and 2.7% lower than the year-ago month
  • GST mop-up in October: Rs 95,380 crore
  • 29% lower than in the year-ago month

Goods and Services Tax (GST)- Council Fixes 28% Uniform Tax Rate For Lottery

  • The GST Council fixed a uniform tax rate of 28 percent on both state and private lottery. Briefing reporters after the 38th meeting of the Council, Revenue Secretary Ajay Bhushan Pandey said the new rate for lottery will come into effect from March 2020. Deadline for GSTR 9 and GSTR 9C return filing for 2017-18 extended to January 31, 2020 from December 31, 2019 earlier.
  • The Goods and Services Tax (GST) is being implemented in the country since 1 July 2017.
  • Minister of Finance and Minister of Corporate Affairs: Nirmala Sitharaman.

Goods and Services Tax (GST) Slabs

  • A committee of officials from the Centre and the states on GST revenue augmentation.
  • Collapse the 5 goods and services tax (GST) slabs into 2 i.e. 10% and 20%
  • Address inverted duty structure distortions in order to simplify the system and combat a shortfall in collections.