No pure GST on petrol, diesel; 28% tax plus VAT a possibility: Official

A peak tax rate of 28 per cent plus states levying some amount of local sales tax or VAT on petrol and diesel is likely to be the tax structure when the two auto fuels are covered under the GST regime, a top government official said.

The peak GST rate plus VAT will be equal to the present tax incidence, which is made up of excise duty, levied by the central government, and VAT charged by the states.

But before the two fuels are put under GST, the Centre has to decide if it is willing to let go of the about Rs 200 billion (Rs 20,000 crore) of input tax credit it currently pockets by keeping petrol, diesel, natural gas, jet fuel and crude oil out of the Goods and Services Tax (GST) regime that came into force from July 1, 2017, the official said.

"There is no pure GST on petrol and diesel anywhere in the world and so in India too it will have to be a combination of GST and VAT," said the official, who is closely involved with the GST implementation.

Got an I-T notice on cash deposits? Don't panic and follow this guide

The Reserve Bank of India (RBI), in tandem with public sector and commercial banks, has undertaken data mining on a massive scale to identify how funds have been moved in the country after November 8. The government has come down hard on individuals and businesses operating doctored accounts, having deregistered and shut more than 100,000 companies and penalised more than 300,000 others. The I-T department has also identified over 37,000 shell or paper companies channelling black money through methods such as hawala. As a part of its Operation Clean Money, the I-T department identifies individuals whose income tax return filings are inconsistent with the amount of cash deposits made in their bank accounts during the demonetisation drive. It then sends a notification through SMS or e-mail, and the individual must provide a response on the department’s website for the same.

If you receive such a notice, do not panic or ignore it. First, verify that the PAN (Permanent Account Number) stated on the notice is yours. Since the I-T department issues notices to a specific PAN and not based on your name, there are chances that an erroneous notice may have been sent to you instead of someone else with the same name or birth date as yours. If you have received such a notice, irrespective of whether you have made the transactions or not, you must log into your account to submit a response. Here's how:

• Visit the income tax department website, https://incometaxindiaefiling.gov.in, and log into your e-filing account.

• Click on 'Cash Transactions, 2016' under the 'Compliance' tab. The page will then list all cash deposits made by you between November 9 and December 30, 2016. 

• Before you begin the verification process, make sure you have all pertaining documents such as receipts for cash income, past tax returns, etc. 

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IT RETURN: Now, pay GST if you earn over Rs 20 lakh per year as rent

IT RETURN - Rental income from residential property has been exempt from GST but any earning over Rs 20 lakh annually from renting or leasing for commercial purposes would attract the levy.

Revenue Secretary Hasmukh Adhia said that if the house property is rent out for shop or office purpose, no Goods and Service Tax (GST) will be levied up to Rs 20 lakh.

"Rental income received from residential house is exempt. But if you have given your unit to commercial enterprise, then it is taxable if you are getting more than Rs 20 lakh as rent," Adhia said at the GST Master Class.

The taxpayer earning more than the exempted threshold will have to register with the GST Network and pay taxes.

GSTN Chief Executive Prakash Kumar said that as many as 69.32 lakh registered excise, service tax and VAT payers have migrated to the GSTN portal. There are over 80 lakh such assessees in the earlier indirect taxation regime.

Out of the 69.32 lakh, as many as 38.51 lakh have completed the entire registration process and registration certicate is being issued to them.

The remaining 30.8 lakh taxpayers are being sent SMS and emails by GSTN so that they complete the registration process by giving the details of the business like main place of business, additional place of business, promoters details.

Besides, over 4.5 lakh new assessees have registered on the GSTN portal since June 25.

Adhia further said that the facility to amend the details of businesses provided to the GSTN portal at the time of registration will open on July 17. Also, registration for GST practioners will open on the same day.

Besides, cancellation of registration can be done online.

GST readiness: EY launches helpdesk to ease transition for small firms

Tax consultancy firm EY has launched a GST helpdesk for small businesses wherein they can post their queries on the new indirect tax regime online.

EY GST Helpdesk is driven by a pool of indirect tax professionals powered by over 800 GST practitioners across 14 cities.

The facility would be available for free to small businesses, traders and entrepreneurs to achieve a seamless transition to GST and queries can be posted on EY India Tax Insights App, DigiGST website and EY_India on Twitter.

"This facility will help in enabling a smooth transition for smaller businesses and traders across the country," EY India Chairman Rajiv Memani said.

Businesses are in the midst of ensuring GST compliance and they have to align their software systems as per the GST requirement as well as adapt themselves to the new return filing and invoice generating format.

"We believe this helpdesk will be of great help to small entrepreneurs and help them realise the benefits of GST," EY India National Tax Leader Sudhir Kapadia said.

Goods and Services Tax (GST), rolled out from July 1, unifies 17 different taxes like excise, service tax and VAT and will transform India into a single market for seamless transfer of goods and services.

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I-T to attach shares if Cairn Energy fails to pay Rs 10,395 cr tax

The tax department has slapped a fresh notice on UK's Cairn Energy Plc seeking to take over the firm's residual 9.8 per cent stake in its erstwhile Indian subsidiary to recover Rs 10,395 crore retrospective tax demand.

The tax department had in an unprecedented move had last month appropriated Rs 1,500 crore of tax refund due to Cairn Energy and another Rs 666 crore of dividend income due to it for three years from its erstwhile subsidiary (now Vedanta) to recover the Rs 10,247 crore of tax plus interest.

It has again written to Cairn Energy on June 26 asking it to repay the balance tax due, failing which it will take over its 9.8 per cent shareholding in Cairn India, a source said requesting not to be named as the information is not yet public.

In the notice, the Income Tax Department gave the British firm 15 days to repay or face attachment of shares.

The department moved to recover the tax after Cairn Energy lost an appeal against the retrospective tax demand in tax tribunal ITAT. It on March 31 issued a notice seeking Rs 10,247 crore tax by June 15. As the company failed to pay, it went ahead to take over the refund and dividend income.

The source said about Rs 2,200 crore recovered so far does not even fully cover the interest due on principal tax demand of Rs 10,247 crore which was levied over alleged capital gains the company had made in 2006 when it transfered India assets to a newly created firm, Cairn India and listed in on stock exchanges.

The outstanding tax demand is Rs 10,395 crore, he said, adding an interest at the rate of 1 per cent will keep adding up every month on the tax demand.

"Cairn Energy has time till July 11 to reply to the notice sent by tax recovery officer under Income Tax Certificate Proceedings rules. If the company does not reply, then the department is likely to issue warrant which will be followed by a formal share attachment notice," the source said.

Nearly 15% growth in direct tax collections for FY18: CBDT

IT RETURN- Provisional figures for direct tax collections up to June 2017 show net collection at Rs 1.42 lakh crore, which was 14.8 percent higher than net collection for the corresponding period of last year.

A Central Board of Direct Taxes (CBDT) statement released on Thursday said the net direct tax collection represented 14.5 percent of total budget estimates of direct taxes for fiscal 2017-18 (Rs. 9.8 lakh crore).

Corporate Income Tax (CIT) gross collections grew at 4.8 percent, while the growth under Personal Income Tax (PIT), including Securities Transaction Tax (STT) was 12.9 percent.

However, after adjusting for refunds, the net growth in CIT collections was 22.4 percent, while that of PIT was of 8.5 percent.

The CBDT informed that refunds amounting to Rs.55,520 crore have been issued between April and June, 2017, which is 5.2 percent lower than refunds issued during fiscal 2016-17 in the same period.

An amount of Rs. 58,783 crore was received as advance tax up to June 30, 2017, reflecting a growth of 11.9 percent over advance tax payments for the corresponding period of last year.

The growth in Corporate Advance Tax was 8.1 percent and that in Personal Advance Tax was 40.3 percent.

Demonetisation effect: Direct tax mop-up grows 15% to Rs 1.42 lakh cr in Q1

Advance tax paid by individuals recorded 40 per cent growth in the first quarter (April-June) of the current financial year.

This could be an impact of the demonetisation of high-value currencies, with more non-corporate entities recording higher incomes. 

Overall direct tax collection after refunds expanded by 14.8 per cent to Rs 1.42 lakh crore over the corresponding period in 2016. 

“The government has benefited from demonetisation, as people have started reporting higher income,” Sushil Chandra, chairman of the Central Board of Direct Taxes, told Business Standard. 

Overall advance taxes, both personal and corporate, grew by 11.9 per cent to Rs 58,783 crore. Advance tax is paid within a specified period after the money is earned, rather than waiting for the end of the financial year.

Electronic filing of income tax returns up to June for 2016-17 grew by 18 per cent, suggesting that more people regularised their unaccounted income. “People are aware now that the income tax department is carrying out lots of searches and surveys and that black money will not be tolerated any more,” said Chandra. 

Corporate advance tax collections were up 8.1 per cent. Corporate tax collection, net of refunds, grew by 22 per cent; gross collections grew 4.8 per cent. Refunds, worth Rs 55,520 crore, were 5.2 per cent lower than last year. 

“Last year, we cleared a lot of pending refunds for the year-ago period, whereas there are no pending refunds of the past fiscal (year) this time,” said an official. 

Make in India arms too? Jaitley says new defence manufacturing policy soon

The government is in ‘advanced stages’ of formulating a new policy to increase domestic defence manufacturing and reduce dependence on the imported high-tech military, Finance and Defence Minister Arun Jaitley said on Friday.

"India is the world's largest arms importer, spending some 1.8 per cent of its GDP on defence. It imports about 70 per cent of defence equipment, a proposition which the government wants to change,” Jaitley said at an event organised by industry body CII.

"We are in the advanced stages of formulating a policy where we can ensure that instead of just being buyers, on the strength of technological and other tie-ups, India also becomes a manufacturing economy," he said.

Jaitley did not give additional details on the proposed policy. "The response that we have from domestic and international industry has been quite encouraging itself," he added.

Additionally, he stated that there would not be any massive surprises in fixing tax rates under the new GST regime and that new rates under the nationwide tax regime, expected to be rolled out from July 1, not be "significantly different" from current levels.

He, however, added that companies should pass on to consumers the benefit of reduction in taxes under GST which will eliminate the current compounding effect of different central and state levies. The GST Council, headed by Jaitley and comprising representatives of all the states, is scheduled to meet in Srinagar on May 18-19 to finalise tax rates on different goods and services after unifying at least 10 indirect taxes into the Goods and Services Tax (GST).

"We are now in final stages of fixing tariffs for different commodities. The formula under which it is being done has also been explained and therefore nobody is going to be taken by surprise, it's not going to be very significantly different," Jaitley said.
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It's a shame Indians don't want to pay taxes: SC talks tough on Aadhaar

The Supreme Court on Wednesday asked why there was no objection from lawmakers on the government’s decision to make Aadhaar mandatory for making permanent account number (PAN) cards, a move which was given effect by the latest budget from July 1.

“542 persons are sitting in Parliament, why do they not object to it? If they are not objecting, why should we go into it,” a Bench comprising Justices A K Sikri and Ashok Bhushan said.

When it was told that the Centre has earlier made a statement in the apex court that it would not make Aadhaar mandatory, the Bench said, “They cannot be bound by it. It cannot preclude Parliament from enacting a statutory provision.”

The court was hearing three petitions challenging the constitutional validity of section 139AA of the Income Tax (IT) Act. Section 139AA, introduced through the latest Budget and the Finance Act, 2017, provides for mandatory quoting of Aadhaar or enrolment ID of Aadhaar application form for filing of I-T returns and making application for allotment of PAN with effect from July 1, 2017.

The Bench also observed that tax evasion existed in India and it was a “shame” that citizens do not want to pay taxes.

The court said there was no doubt that Aadhaar should be voluntary and observed since tax evasion existed, the government could bring in new statute to stop such “leakage”.

Defending the Centre’s stand to make Aadhaar mandatory for filing of income tax returns and to apply for PAN, Attorney-General Mukul Rohatgi referred to around 10 lakh fake PAN cards and said Aadhaar was the only system which could prevent duplication or fake cards.

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Modi pitches for simultaneous elections, changing fiscal year to Jan-Dec

BREAKING NEWS - Prime Minister Narendra Modi today pitched for conducting simultaneous elections to the Lok Sabha and the state assemblies and shifting to a January- December fiscal year.

Addressing the Niti Aayog Governing Council's third meeting, which was attended by several state chief ministers, Modi said for long, India had suffered from economic and political mismanagement.

"Because of poor time management, many good initiatives and schemes had failed to deliver the anticipated results," he said, adding there is a need to develop robust arrangements that could function amidst diversity.

The prime minister called for carrying forward the debate and discussions on holding simultaneous elections to Parliament and state legislatures.

On the Goods and Services Tax (GST), Modi asked the states to make legislative arrangements "without delay" for the rollout of the indirect tax regime from July 1.

The GST, which will subsume central excise, service tax, Value Added Tax (VAT) and other local levies, is scheduled to be rolled out from July 1.

The consensus on GST reflects the spirit of 'one nation, one aspiration, one determination', Modi earlier said in his opening remarks at the meeting.

Referring to the change in the budget dates, he said in a country where agricultural income is exceedingly important, budgets should be prepared immediately after the receipt of agricultural incomes for the year.
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ITR form simplified for salaried individuals; e-filing to start from April

A crisp income tax form for salaried individuals will be introduced from April 1, doing away with some columns to simplify the filing of returns.

Individuals with salary and interest income will have to fill fewer columns as some of these for claiming income deductions have been clubbed in ITR1 form called 'Sahaj'.

In the form for Assessment Year 2017-18, deductions claimed under different sections of Chapter VIA have been removed and only mostly used ones have been included.

"Columns that will remain include those for claiming deductions under Section 80C, mediclaim (80D). Those individuals who want to show deductions under other heads can do so by selecting an option," an official told PTI.

Currently, the ITR 1/Sahaj has 18 different columns for claiming deductions under Section 80 of the Income Tax Act.

Under section 80C, a deduction of Rs 1.5 lakh can be claimed from total income for investments in LIC, PPF and repayment of housing loan.

Section 80D provides for tax deduction from the total taxable income for the payment of medical insurance premium. This deduction is over and above the deduction under Section 80C. (READ MORE)

Rs 48,000 cr Delhi Budget: AAP focuses on health, education, no new taxes

Breaking News - A Rs 48,000-crore budget for the national capital was today presented by the AAP government, laying major focus on improving transport, health, water distribution and education infrastructure.

In its third Budget, the Arvind Kejriwal government abolished the plan and non-plan expenditure heads and presented it in terms of revenue and capital classification in line with the Centre's decision.

There was no proposal on levying any new tax.

In a first, Deputy Chief Minister Manish Sisodia, who holds the finance portfolio, also presented an "outcome budget" which he said would act like a "contract" between the government and the people.

Sisodia asserted that the economy of the state will grow "despite demonetisation".

At the same time, he said note ban has led to contraction in the city's estimated GSDP for the ongoing financial year (at constant prices) although it will still be higher than the projected growth at the national level.(READ MORE)

'Made in India' iPhones: Apple to seek incentives at Jan 25 govt meeting

Latets Business News - A team of the US-based iPhone maker Apple will meet a group of senior officials from ministries, including IT and finance, on January 25 to discuss its demands for setting up a manufacturing unit in the country.

Officials from departments of commerce, industrial policy and promotion (DIPP), revenue, environment and forest, electronics and information technology (DeITY) will take part in the deliberations.

In a communication to the government, the Cupertino-based technology major has asked for various incentives including the tax incentives and long-term duty exemptions, to enter the manufacturing sector in India.

However, the sources said the technology major should set up the manufacturing unit in India without seeking additional support.

As many as 42 companies are making mobile phones in India, including Chinese firm Huawei and Xiaomi, and no firm has approached the government for any additional incentives.

Currently, the government provides support by way of benefits under the Modified Special Incentive Package Scheme (MSIPS) to boost electronic manufacturing.(Read More)