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Central board of Indirect Taxes
- CBIC member John Joseph wrote several letters to zonal heads, pulled up its field formations for lagging behind their state- level counterparts in revenue collection and enforcement of anti-evasion measures. He has pointed out how they are lax on using the data analytics reports generated on ’risky taxpayers’.
- He also reminded the field formations that director general of analytics and risk management (DGARM) has prepared reports on 88,000 GST registrants based on their compliance behaviour and asked each range to verify the contents of the report for at least three taxpayers each week and upload feedback on the same so that reports can be improved soon.
- Three weeks later, Joseph shot another letter to zone-heads “I am much pained to observe that even after 3 weeks with almost 88,000 GSTN number only 1,500 feed backs have been received in the DDM portal so far”.
- Last year, the revenue secretary Hasmukh Adhia too had pointed out that state tax officials were doing decisively better than their counterparts with the centre in revenue collection and recovery.
- Central board of direct taxes (CBDT) has sent letters to principal chief commissioners of income tax, asking them to identify the start-up cases pertaining to them and to ensure that no coercive action is taken in these cases and also directed to request all zones to kindly ensure that appeals pending in these cases, if any, are disposed of on priority”
30% growth in IT returns
- Income tax e-returns filed has increase nearly 30% in April- February as compared with 17% in FY18 (27% in FY 16 and 20% in FY 17) with 6.4 crore taxpayers in the first 11 months of the fiscal year. The government is expecting 7.6 crore returns to be filed by the end of FY19 against 6.7 crore in FY18.
- I-T department started sending notices to people who engaged in high- value transaction but failed to file I-T returns after that in 15 days 33,000 persons filed returns for the first time and 3 lakh people visited the e-filing website. The government gives demonetisation as one of the main reasons for e-returns.
Finance minister on corporate tax
- FICCI President Sandip Somany said that India’s Finance Minister Arun Jaitley promised in (2015-16 budget), as the revenue collection from GST go up over a period of time he reduced the corporate tax rate from 30% to 25% and also have a discussion on taxation, job creation, and boosting industrial output.
- In the budget 2017, the government had reduced corporate tax rate to 25% for companies whose turnover was less than Rs 50 crore in financial year 2015-16, and in budget 2018-19 reduced tax rate of 25% to companies with turnover of up to Rs 250 crore and about 7,000 companies whose turnover is above Rs 250 crore remains in 30% slab.
Tax lens on 87,000
- The Central Board of Direct Taxes (CBDT) has ordered ”best judgement assessment” of individuals who failed to comply with the income tax department’s even after the department had sent out SMSes, emails and also issued notices to around 300,000 individuals, who made substantial cash deposits after the November 2016 demonetisation to furnish income-tax returns for the assessment year 2017-18 , but around 87,000 taxpayers failed to comply with those notices.
- The apex body for direct taxes has now instructed assessing officers (AO) to conclude “best judgement assessment proceedings” to deal with such noncompliance. The CBDT has said that the assessment should be completed by March 31and, in any case, by June 30.
High value cars, jewellery to become cheaper
- Central Board of Indirect Taxes and Customs said that the Tax Collection at Source (TCS) amount would be excluded from the value of goods while computing the Goods and Services Tax (GST) liability. TCS is also levied on other purchases at different rates.
- Under the Income Tax Act, tax collection at source (TCS) is levied at 1% on purchase of –
- Motor vehicles above Rs 10 lakh
- Jewellery exceeding Rs 5 lakh
- Bullion over Rs 2 lakh
- Earlier in December, the CBIC has said that the TCS amount would be included but in view of the representations received from various stakeholders and after consultation with the Central Board of Direct Taxes (CBDT), the CBIC took the decision to exclude it (TCS).
Government Pinning hopes on advance tax collection
- The government had earlier estimated Rs. 11.5 lakh crore from direct tax collection but now increase of Rs 50,000 crore in the interim budget 2019-20 to meet the revised budget target of Rs 12 lakh crore from direct tax collection.
Net direct tax collection
- The net direct tax collection during April-January of this fiscal stood at Rs. 7.89 lakh crore as against Rs 12 lakh crore targeted for the entire fiscal of 2018-19. On March 16 the net direct tax collection figure has crossed the Rs 10 lakh crore mark, the fourth and final installment of tax payment.
Direct tax collection falls short
- Pressure is mounting on tax officials to meet revenue collection target. Raising concerns over the “alarming situation” of direct tax collection, direct tax receipts are just 85% of the full year estimate. Against the budget target of Rs 12 lakh crore, only Rs 10,21,251 crore has been collected as on March 23. The GST collection was originally budgeted at Rs 13.71 lakh crore which had been lower to Rs 11.47 lakh crore in the revised estimated for 2018-19.
- The Central Board Direct Taxes (CBDT) has asked its officials to pay immediate attention on measures to shore up revenues.
Big GST shortfalls
- In the latest budget the tax collection projection is 13.5%. Government realized that the expected boom in FY19 collections- taxes were to rise by 17.2% was a one-time event. Boom was driven by more people paying income tax due to the fear of being caught out by the surveillance mechanism in-built into GST. The government already said it was looking at a Rs 100,000 crore shortfall in GST collections.
- 28 crore to 7.41 crore includes those who file their return whether electronically or physically, also who pay TDS but don’t file returns. More important, despite the 1.5 times hike in nominal GDP between FY13 and FY17, the average tax paid across individuals and companies rose by a mere 7%, from Rs 104,704 to Rs 112,604. In 2014 the tax-to-GDP ratio was 10.1% and now it become 11.9% in FY19, a hike of 20%. While the number of e-filers rose 2.3 times.
- The number of crorepatis is quiet small compared to the PRICE estimate of one million crorepati households in the country. PRICE’s data is for households, but that translates to around 6.6 lakh individuals with an annual income of more than Rs 1 crore a year. The tax data for FY17 shows 1.4 million taxpayers declared an annual income of more than Rs 20 lakh; 1.3 million in the case of individual taxpayers. PRICE’s estimate of 8 million households or 5.3 million individuals with an income of more than Rs 20 lakh per annum.
- All eyes will now be on Project Insight, a computerisation of all databases with extensive search and matching facilities; once this is done, and the Aadhaar-linking of PAN numbers takes place, the taxman will have a very good estimate of expenditure and will match this with income statements.
- The country’s fiscal deficit touched 134.2% of the full-year revised budgeted estimate at the end of February 2019 due to the tepid growth in revenue collections.
- “Fiscal deficit for April-February 2018-19 was Rs 8.51 lakh crore as against the revised estimate of Rs 6.34 lakh crore for the entire year”. as per the Controller General of Accounts.
- According to the CGA data revenue receipts of the central government was Rs 12.65 lakh crore or 73.2% of the revised budgetary estimate at February end.
- Economic Affairs Secretary S C Garg said that government is committed to restrict the fiscal deficit at 3.4 % of the Gross Domestic Product (GDP) as envisaged in the budget.
- The government’s tax revenue stood at Rs. 10.94 lakh crore and non-tax revenue was Rs 1.7 lakh crore and total expenditure incurred by the government during April-February 2018-19 was Rs 21.88 lakh crore. Out of the total revenue expenditure, Rs 5.01 lakh crore was on account of interest payments and Rs 2.63 lakh crore on major subsidies.
- In October-December 2018 and 2017 the current account deficit widened to $ 16.9 billion and $ 13.7billion.
- As a percentage of GDP, CAD in the reporting quarter rode to 2.5% against 2.1% in the year ago quarter.
- Reserve Bank of India’s statement on ‘Developments in India’s Balance of Payment’s: higher trade deficit at $49.5 billion as compared with $44 billion a year ago.
- Net services receipts increased by 2.8 percent on a year on year basis to $21.3 billion, remittances by Indians employed overseas, amount to $18.7 billion, net foreign direct investment at $7.5 billion in 2018-19, Portfolio investment recorded net outflow of $2.1 billion in quarter 3 of 2018-19, non-resident Indian deposits nudged up only $139 million against $3.32 billion, there is a depletion of $4.3 billion in foreign exchange reserves as against an accretion of $9.4 billion in the year ago period.