Budget 2024 Updates

TPO gets powers to deal with domestic transactionsOne more Vivad Se Vishwas Scheme; Date to be notifiedNo deduction u/s 37 for settlement amount if paid for violation of any lawFM proposes to lessen tedium of TDS; reduces rates in many casesFM overhauls capital gains regime; to come into play from todayFM hikes exemption limit for long-term capital gain to Rs 1.25 lakh + hikes tax rate to 12.5% on specified financial assetsTourism: Temple corridors to be developed in BiharCGST - Finance Bill proposes to amend Sec 9 to take ENA out of purview of GST + inserts Sec 11A to regularise non-levy of tax on general practice in tradeCGST - Sub-sections to be inserted in Act to relax time-limit to avail ITC u/s 16(4) + New Sec 74A proposed to provide for common time limit for demand notices in fraud cases3.4% of GDP allocated as Capital expenditure to support infra sectorCGST - Proviso to be inserted in Sec 30(2) to provide for enabling conditions for revocation of registration + Amendment in Sec 39 to mandate return filing by TDS deductors even if there is no deduction in a particular monthIGST - Amendment proposed to prohibit refund of unutilised ITC on zero-rated supplyIncome tax - Finance bill revamps re-assessment regime againCustoms - Finance Bill proposes to amend Sec 28DA for acceptance of different types of proof of origin under FTAsFM hikes standard deduction to Rs 75K for new ITR regime + revises tax rates for all income slabs + Rs 7000 Cr revenue foregoneIncome tax - Search & Seizure cases - Block assessment is backBudget withdraws 2% equalisation levyFM reduces corporate tax rate for foreign companies to 35%FM proposes vivad se vishwas scheme + hikes monetary limits for filing appealsFM proposes 20% capital gains tax on short-term assets + listed financial assets held for more than one year to be classified as long-termGovt scraps TDS on Mutual Funds + decriminalises delay in depositing TDS + rationalisation of compounding of offences + revamps reassessment periodBudget proposes comprehensive review of I-T Act, 1961 + simplifies provisions for charities and TDSFM reduces customs duty on gold and silver to 6% + Nil BCD on nickel cathodeBudget proposes to reduce BCD on mobile phone and chargers to 15% + exempts 25 minerals from customs dutyFM exempts cancer medicines from Customs duty + amends BCD for various machinesFM proposes Rs 48 lakh expenditure outlay; 4.9% fiscal deficitFM announces Rs 1 lakh crore fund for developing space economyPromotion of Tourism - Vishnupad temple and Bodh Gaya temple corridors to be supportedFM announces over Rs 11 lakh crore capital expenditure in current fiscalGovt to invest in small Nuclear energy plants in partnership with private playersCentre to ask States to lower stamp duty for women purchasers of housesIBC - More Benches of NCLT to be set up to speed up recoveryFM spikes limit of Mudra loan to Rs 20 lakhsBudget offers financial aid to labour-intensive MSMEs in manufacturing sectorGovt announces 3 crore additional houses under PM SchemeGovt to secure Rs 15K loan for AP from multilateral agenciesGovt to frame new policy for all-round development of Bihar, Jharkhand and OdishaGovt to give one-month salary to all new recruits in formal sector through EPFOGovt to promote vegetable clusters closer to urban settlementsGovt to focus on productivity of agriculture with climate-resilient seedsFM allocates Rs 2 lakh outlay for PM's five schemes for job creation and farmersFM Nirmala Sitharaman presents 7th Union Budget in ParliamentBudget 2024: FM arrives at Parliament; Speech to begin at 11AMEconomic Survey 2023-24 - from GST PerspectiveUkrainian FM goes on tour to ChinaI-T- Additions framed u/s 69A are untenable where affidavits submitted by assessee's parents to explain source of cash deposits, were discarded by AO without consideration : ITATSurvey acknowledges productivity loss due to mental health disordersI-T- Short term capital gains returned by the assessee in terms of provisions of section 50 of the Act on assets held for a period of more than 36 months be treated as long term capital gains: ITATExpenditure on social services up from 6.7% to 7.8% of GDP: SurveyI-T-Additions framed u/s 68 are upheld where assessee is unable to prove genuineness of transaction involving purchase and sale of penny stock: ITATTrade deficit contracts to USD 78 bn from USD 126 bn in 2023I-T-Re-assessment is invalidated when there is no failure on part of assessee to make full and true disclosure of facts necessary for assessment: ITATCorporate profitability has peaked to 15-yr-old high between 2020-2023: SurveyI-T- When cash generated out of sales has been credited in the books of accounts, the provisions of Sec.69A could not be invoked: ITATBudget 2024: More relief for senior citizens & individual taxpayers on card; tweaking of capital gains tax likely; steady capital expenditure to stayI-T- If any amount invested is purely a strategic investment & for purpose of commercial expediency, then AO cannot hold such investments to be for non-business purpose: ITATGoogle backpedals on plan to scrap cookies from ChromeCus - For a HNWI individual, an expensive watch of 'Rolex' make would be his personal effect but same may not be the case if the person is of mere means - Pendant studded with diamonds not liable for confiscation: HCGovt amends Recruitment Rules for Debts Recovery TribunalGST - Even if no date, time or place of hearing is indicated in the notice issued, it was the duty of assessee to file his reply to SCN, which was admittedly received - Plea regarding violation of principles of natural justice cannot be countenanced: HCAbhinav Bindra conferred with Olympic OrderGST - Mismatch between value of e-way bills generated on portal and returns filed in Form GSTR-3B - Petitioner did not provide a comprehensive explanation - To remit sum of Rs.3.50 crores within six weeks - Matter remanded: HCHackers mercilessly hack Bangladesh PM’s website along with police portalsGST - Rule 30 of Rules, 2017 - Assessing officer ought to have issued summons and obtained clarification rather than estimating the outward supply value at 110% of purchase value - Order set aside and matter remanded subject to remit of 10% disputed tax demand: HCUS law-makers call for resignation of Secret Service chief in Trump assassination caseGST - Net ITC shown incorrectly - An inadvertent error was committed and such error was rectified, albeit irregularly, however, sum recovered from petitioner's bank account - Order set aside and matter remanded: HCKarnataka IT Industries piling pressure on govt to extend working hoursGST - Since notification is declared unconstitutional, Amount of IGST paid pursuant to Entry No. 10 of Notification No. 10 of 2017 is to be refunded along with statutory interest: HCStudy says earth’s water depleting fastFDI inflows slide to USD 26.5 bn in 2024 from USD 42 bn in 2023: Economic Survey
Political cul-de-sac for GST: Tax reforms - no longer jindabad!

TIOL - COB( WEB) - 217
DECEMBER 09, 2010

By Shailendra Kumar, Editor

UNITY among opposition parties, political thinkers often believe, is a healthy bulwark against the abuse of power by the ruling party or coalition. But, so far as the issue of the proposed Goods and Services Tax (GST) goes, it has mortally bruised the fiscal interests of the exchequers and also the greater cause of commerce in the country. What happened on Monday was beyond the latitude of expectations of most GST watchers. Although the cat had already jumped out of the bag that the members of the Empowered Committee on GST might not take up the issue of Constitutional Amendment Draft Bill but the final attendance reality turned out to be more shocking and disappointing for all stake-holders in the country. All the BJP-ruled States virtually boycotted the meet and probably whispered bon voyage to the GST-ship as if they had nothing to do with it or probably knew that it was destined to sink after sailing a few nautical miles away from the shore!

Sources confided in TIOL that so pathetic looked the attendance at this meet that it did not require astrological domain knowledge to predict that the proposed indirect tax reform has finally hit against the walls of a blind alley. Only eight Finance Ministers attended it - some of them even walked away quite early. Besides BJP States, even major Congress-ruled States like Maharashtra did not send its representative. Out of eight, a couple of them were from very small States which generally prefer to be onlookers rather than an active participant.

This has happened close on the heels of the inconsequential Goa meet. Netizens may recall that before meeting on December 6 in New Delhi, a large number of State FMs had gathered at the golden sandy beaches of Goa, some of them even with their families, to discuss about the proposed reforms. But when no press statement was issued, the field was left open for the media persons to speculate what might have actually transpired at this inviting tourist destination!

Things began going astray or off the track right from the August 4 meet in New Delhi when the EC rejected the Draft Bill proposing the twin bodies of the GST Council and the Dispute Settlement Authority (DSA). This was the time when Mr Amit Shah, a Minister in the Gujarat Government, was arrested, and the BJP preferred trading charges against the Central Government. The EC led by the soft-spoken West Bengal Finance Minister was forced by the majority to reject the Draft Bill on allegations like lopsided distribution of power in favour of the Centre. Veto power proposed to be vested in the Union Finance Minister was flayed in shrill voice. The constitution of DSA was stated to be avoidable at that stage.

Soon, the North Block honchos rephrased the contention-brewing provisions and dispensed with the veto power provision. They proposed that the GST Council may be driven by the 'Doctrine of Consensus'. However, the Centre stuck to the need for a DSA. The EC promised to reconsider the same in view of the close deadline of the monsoon session of Parliament as the Draft was earlier planned to be tabled and then referred to the Standing Committee. But at the next meeting, a good number of States harped on the dilution of their fiscal autonomy and voiced concern against the 'hurried reform agenda'. They also came up with a strange but 'intaxicating' alternative proposal for introducing a FLOOR RATE and a BAND RATE. In simple words, they wanted certain floor rates of GST which meant no State could go below that rate. And for the Band Rate, they articulated that they should have the flexibility to increase the rates by one or two per cent as and when they wished so.

Predictably, their new proposal did not cut much ice with the Centre which kept on insisting on the approval for the Draft Bill before other dimensions of the GST roll-out could be discussed. Even as the Finance Minister, Mr Pranab Mukherjee, continued to exude optimism, Mr Asim Dasgupta sent him a letter proposing a new alternative model - to allow States to collect Service tax on behalf of the Centre and the States in turn may allow credit for the same, and once they collect VAT and Service Tax, it would be very close to the proposed GST minus the Central Excise duty. Mr Mukherjee did not even spare second thought to reject it with disdain.

Probably, having expected such a predictable response from the Centre, the sharply-divided house of EC just wanted to last its pre-determined longevity. And, thus it never took up the ponderable issue of Draft Bill and kept itself busy with the 'toying issues' like the Exemption List, the threshold limit and the GST rates which come much after the basic legal mandate to levy GST by both the Centre and the States is obtained. That is how the Goa summit did not produce even a facile statement on the issue. The same happened in Delhi where Mr Dasgupta had no news to share with the media. He would now be heading for the State polls, and the taxpayers need not expect anything much meaningful from the EC in the coming months.

Interestingly, the Draft Bill indeed appears to be a hurriedly worded document which was not blessed with the necessary thoughts and vision required for a healthy legislation. For instance, the Bill proposes to keep some of the commodities like the HSD, natural gas, motor spirit, ATF and alcohol, out of the GST net. What fails to appeal to the common sense is the fact that why should a list of non-GST goods be made a part of the elaborate and contentious exercise of Constitutional amendment. Why can't its makers simply leave it to the discretion of the GST Council which may notify or denotify certain goods from the basket of GST-levied goods. This way it would be simpler to remove or add certain goods in future rather every time when a consensus emerges to bring certain exempted goods within the ambit of GST, one would have to go back to the Parliament for the same elaborate exercise of amendment, and then the vetting of the two-third State Assemblies.

Aside this issue, there are many other aspects which call for more decent planning by all the stake-holders. Although many of us may not like to believe that the proposed reform is dead but the fact remains that even if it is recoupable, it may not happen in the remaining period of the UPA-II Government. The political landscape has to undergo a major change before the proposed GST could get some fresh cylinders of oxygen. Till then, let's hope against the hope and focus on reforming the present system of indirect taxation. The Union Budget 2011 is not far away, and it can be a cajoling precursor for major changes in the future. Let's hope Mr Mukherjee continues to retain his aura of positivism and do what is needed to be done to make our tax system more commerce-friendly.

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