Budget 2024 Updates

FM hikes exemption limit for long-term capital gain to Rs 1.25 lakh + hikes tax rate to 12.5% on specified financial assetsCGST - 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 casesCGST - 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 supplyCustoms - 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 foregoneBudget 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
States to rediscover GST on July 21; Nandan Nilekani to take States through voyage of rediscovery!

TIOL - COB(WEB) - 196
JULY 15, 2010

By Shailendra Kumar, Editor

THE proposed GST is by all standards a gigantic task. What makes it more arduous is the presence of heterogeneous stake-holders. States represented by the Empowered Committee (EC) constitute the most unwilling and reluctant lot. But history seems to be luring them. Coming Wednesday is going to be perhaps the last chance for the States to arrive at a consensus on some of the basic policy decisions if April 1, 2011 is to be the historic day for both the DTC and the GST. The EC is meeting on July 21 in New Delhi. The three basic issues which the EC cannot sidestep this time are the exemption threshold, number of goods and taxes to be kept outside the purview of GST (the negative list) and the retention of the common exemption notifications. Centre has already made up its mind for Rs 10 lakh exemption threshold - same is the State. The EC has to simply express its agreement to it. Most of the items which would fall under the head of exempted goods are almost known - petrol, diesel, alcohol etc. States have to simply endorse the final list. For pruning exemption notifications, the EC has to decide on 99 notifications under VAT and 356 exemption notifications of the Centre. What is crystal clear is that there are not going to be goods or services which would be exempted by the Centre but would be taxed by the States like today's scenario under VAT regime. If certain goods are to be exempted, they are to be exempted under both the CGST and the SGST.

Another important item on the EC's agenda is going to be the Constitutional Amendment. Unless the Constitution is amended and powers are given to both the Centre and the States to tax the same set of goods and services, the GST Act cannot be tabled in the Parliament or State Assemblies. It is learnt that the Centre has done its job on its part. The Law Minister has approved the final draft, and the FM has also put his seal of approval. The three highlighting features of this Amendment are believed to be a) the powers to be vested in both the Centre and the States to levy GST along with a negative list of items; b) the GST Council, and c) the formation of GST Commission / Tribunal to sort out disputes relating to deviant States.

The Amendment is learnt to have proposed the constitution of GST Council which will have the Finance Minister and the MoS(R) as two representative members for the Centre and Finance Ministers of 28 States. The Union Finance Minister will be its Chairman, and will also have a vote. Since States will have a structural majority right from the beginning, the veto power couched in FM's vote will rest with the Centre. All decisions of this Council will mandatorily be approved by the two-third majority and ''agreed to'' by the Union Finance Minister.

In case any State Govt deviates from the common GST structure at any stage of implementation of the new regime, one may go to the GST Commission / Tribunal for judicially binding decision. The Commission will have three Members - one from the judiciary and one each from the Centre and States. Its formation will be consented by the Chief Justice of India. The Commission will determine the quantum of penalty to be paid by the defaulting State or the Centre.

The EC will have to approve the Constitutional Amendment at its forthcoming conclave so that it could be tabled in Parliament during the latter half of the Monsoon Session. States could also simultaneously seek approval of their own state assemblies. True, it would be certainly referred to the Lok Sabha Standing Committee which will have a couple of months to ponder over the wordings, the phrases and the expressions used in the amendment. The Standing Committee will ensure that the proposed amendment does not dilute the traces of a stronger Centre as enshrined by our constitution-makers. Once it is approved, a bill will be tabled for approval of the Parliament during Winter Session. Netizens may recall that unless this amendment sails through the House approval, the GST Bill cannot be tabled either by the Centre or the States. If everything goes through smoothly, the GST Acts, based on model legislations which are being fine-tuned, may be tabled during the Budget Session and the Act may be in its groove on April 1, 2011. The making of rules falls under the delegated powers of the Govt, and they can be notified close to the deadline.

The most important and challenging dimension of the proposed regime is the IT Infrastructure. Unless a robust IT infrastructure is put in place, there would be no GST. It is learnt that the IT juggernaut, Mr Nandan Nilekani, is ready with his detailed presentation for the States. He has given an impressive presentation to the Union Finance Minister who has given his nod to his detailed configuration about a common GST portal. Mr Nilekani is now scheduled to give a similar-type of presentation to the EC on July 21. Broadly, his presentation is learnt to have emphasised on the need for a Common Portal. Why common portal? The rationale is to make it convenient for GST taxpayers. Whether taxpayers would be paying CGST, SGST or IGST, they just need to visit one portal which would take care of all the three basic activities - Registration, Payment of taxes and Return-filing. Although the payments would be made online at this portal but the payments would automatically be going to the respective accounting heads of the States. However, the documents and other details would be coming to the Centre for record-keeping and computation of shares. This portal which is going to be a revenue booster, would initially capture invoices issued by only dealers. This is important for reconciling credit. However, a provision will be made to capture invoices even at the retail-stage but only after two or three years. Once this stage comes, the GST would be a fully integrated and perfect system whereby credit would be taken through a seamless process for all taxes paid on raw materials. This common portal is also going to propose integration of the existing IT-systems developed by some of the IT-savvy States and also the Centre which has developed ACES in Central Excise.

If this is going to be the future scenario of working of the GST, what role the CBEC field formations would have to play? The twin roles the CBEC would be playing are the Audit and Anti-Evasion. Audit is going to be the most critical instrument to detect duty evasion. Scrutinising invoices would be a gigantic task, and IT-enabled audit is the only solution. Anti-evasion to some extent would be the second activity for the CBEC. But in the new IT-enabled, computer-based tax compliance matrix, audit will have a much greater role than the physical anti-evasion. This is more so as the entire system will work on the plank of self-assessment.

Let's hope the EC lives upto the expectations of the Nation, and does not miss the opportunity to take a few giant strides forward. Let's also hope that the EC when it meets the Union Finance Minister in the afternoon of July 21, carries the good news for the new regime, and also agrees with Mr Nilekani's roadmap for implementation of the GST. Mr Nilekani who has no axe to grind in this entire matrix of policy decisions and who is the 'honest broker' in the entire exercise, is truly a rare piece of talent who can see it through the tough phase of implementation. Let's also hope all the stake-holders work in tandem and make this historic event happen by April 1, 2011.

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