Page 5 - Taxation

Biz can claim ITC on goods procured for distribution to dealers: GST AAR

Businesses can claim input tax credit on items, like gold coins and white goods, procured for distribution to dealers upon achieving pre-specified sales targets as part of promotional schemes, a GST advance ruling authority has ruled. The Karnataka-bench of the AAR (Authority for Advance Ruling) ruled that ITC can be availed on taxes paid for procurement of white goods or gold coins for the purpose of incentive to dealer as it is a supply. Orient Cement Ltd had approached the AAR seeking ruling in whether ITC can be claimed on distribution of gold coins and white goods to its dealers upon achieving a specified target fixed under the scheme. The company also offers various promotional schemes "Monthly/ Quarterly Quantity Discount Scheme", etc. The said sales promotion scheme helps the company in achieving their sales and collection targets. The AAR noted that the applicant is issuing these gold coins and white goods so procured as incentives as per the agreement reached between himse

Govt losing revenue due to GST, should be neutral with single rate: Debroy

Economic Advisory Council to the Prime Minister Chairman Bibek Debroy on Tuesday said the government was losing revenue due to the GST, which should be revenue neutral with a single rate. Speaking at an event organised by the Calcutta Chamber of Commerce here, he however said that GST has led to a lot of simplification. "The ideal GST is one that has a single rate, and it was meant to be revenue neutral. According to calculations by the finance ministry when GST was first introduced, the average rate should be at least 17 per cent. But, the existing rate is 11.4 per cent. Because of GST, the government is losing revenue," the eminent economist said. Debroy said the public as well as members of the GST Council want the 28 per cent tax rate to come down, but "no one wants the 0 and 3 per cent tax rates to go up". "That way, we will never have a simplified GST," he said at the 'Special Session on Resilient and Self-Sufficient India'. A "lot of abuse" of GST provisions was taking plac

Govt lost Rs 1 trn in taxes in FY21 due to corporate tax cut: MoS Fin

The government lost a little over Rs 1 lakh crore in 2020-21 on account of a cut in corporate taxes, Minister of State for Finance Pankaj Chaudhary said on Tuesday. In September 2019, the government announced a cut in base corporate tax for then existing companies to 22 per cent from 30 per cent; and for new manufacturing firms, incorporated after October 1, 2019, to 15 per cent from 25 per cent. Companies opting for these new tax rates had to forego all exemptions and incentives. The effective tax rate for existing units, after considering surcharges and cess -- such as Swachh Bharat cess and education cess, which are levied on top of the income and corporate tax rates -- is 25.17 per cent as compared to 34.94 per cent earlier. For new units, it is 17.01 per cent as against 29.12 per cent previously. In a written reply in the Rajya Sabha, Chaudhary had said the estimated revenue loss (due to reduction in corporate tax) in FY 2020-21 has been reestimated to be Rs 100,241 crore. In

GST Council to finalise taxing rules on online gaming on August 2

Legislative amendment expected in ongoing monsoon session of Parliament

Changing face of direct taxes: Transformation over a decade

A paradigm shift has been brought in the way the income tax department has been dealing with the taxpayers

NRIs who invest in India through AIFs set up in Gift City get tax exemption

A non-resident investor's income from offshore investments that go through an Alternate Investment Fund set up in an International Financial Services Centre will not be taxed.

GST collection, devolution a success story in NE states: FM Sitharaman

The North Eastern states have scripted a success story in the collection and devolution of the Goods and Services Tax (GST), Union Minister for Finance and Corporate Affairs Nirmala Sitharaman said here on Friday. According to the 2023 RBI report on state finances, the eight NE states have registered a compounded annual GST hike of 27.5 per cent, she said. Sitharaman was speaking at the Investiture Ceremony for conferring the Presidential Award for Specially Distinguished Record of Service' to officers and staff of the Central Board of Indirect Taxes and Customs (CBIC). Assam was the first state to ratify the GST Act, four days after it was passed and since then there has been a 12 times increase in the collection of taxes, the minister said. Assam's sales tax collection prior to the implementation of the GST was Rs 558.26 crore but this has increased manifold to Rs 7,097 crore. Sikkim and Meghalaya too have registered a significant achievement with the former's collection increas

As repetitive taxation fears arise, gaming firms wait for clarity

Industry executives said that repetitive taxation could lead to a 50-60 per cent indirect tax burden on gamers

15% global minimum tax to come into effect next year: OECD tells G20

Global minimum tax of 15 per cent will come into effect from next year and by 2025 almost 90 per cent of MNCs having revenues of more 750 million euros will be subject to the levy in every country of operation, said OECD in its report to G20. "The implementation of the global minimum tax is now well underway and will come into effect from the beginning of next year," the Organisation for Economic Cooperation and Development (OECD) said in a report to G20 finance ministers and central bank governors. The OECD said that till date, around 50 jurisdictions have taken steps to implement the global minimum tax. This figure includes half the members of the G20 and all the member states of the European Union. "The implementation of the global minimum tax continues to gather speed and we estimate that by 2025 almost 90 per cent of global multinational enterprises (MNEs) with revenues above EUR 750 million will be subject to a minimum effective tax rate of 15 per cent in every jurisdiction ..

Indian online gaming firms relocating to avoid tax will be risky: Official

Indian online gaming firms planning to relocate overseas to avoid a new 28% tax on the sector run the risk of violating the country's forex laws, Johri, head of the indirect taxes' department, said

Shares of Indian gaming, casino firms drop after 28% GST imposition

These companies will now have to pay a 28% tax on the entire amount collected from players, instead of the small tax on the fee they charged for real-money games until now

Countries agree to extend digital services tax freeze through 2024: OECD

The first part of the two-pillar deal aims to reallocate taxing rights on about $200 billion in profits from the biggest and most profitable multinationals to the countries where their sales occur

Tweaked definition of SUV will provide clarity on tax structure: Industry

The tweak in the definition of an SUV for attracting a cess over and above the GST rate will provide clarity on the taxation structure for utility vehicles, ensuring that the rate entry is more precise leaving little room for interpretation on the ambit of ground clearance, auto industry experts said on Tuesday. The Goods and Services Tax (GST) Council decided that the definition of an SUV will include only the length (4 metres and above), engine capacity (1,500 cc and more), and ground clearance (unladen ground clearance of 170 mm and more). Automobiles are taxed at 28 per cent GST, with additional cess ranging from 1 per cent to 22 per cent depending on the type of vehicle. SUVs attract the highest GST at the rate of 28 per cent along with a compensation cess at 22 per cent. Maruti Suzuki India Senior Executive Officer (Marketing and Sales) Shashank Srivastava said, "From the various media reports, it appears that the peak cess of 22 per cent over the 28 per cent GST slab is now .

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GST Council to decide on taxation on online gaming, definition of MUVs

The GST Council at its meeting on Tuesday is likely to deliberate on a host of issues including taxation of online gaming, definition of utility vehicles and tightening of norms for registration and claiming ITC. The Council, chaired by Union finance minister and comprising state representatives, is also likely to clarify on GST rates applicable on food and beverages sold in multiplexes, exempt GST on import of cancer drug Dinutuximab, and Food for Special Medical Purposes (FSMP) used in the treatment of rare diseases. It is also expected to finalise contours for setting up appellate tribunal, and demand of the industry for reimbursement of full CGST and 50 per cent IGST in 11 hill states under the 'scheme for budgetary support'. The Council is likely to provide for mandatory physical verification of the business premises of "high risk" applicants before granting of GST registration, as well as reduced time for submitting Pan-linked bank account details to GST authorities. Also, a

4 IRS officers appointed in CBDT under finance ministry: Govt order

Four IRS officers of the Income Tax Department have been appointed as Members in the Central Board of Direct Taxes (CBDT) under the Union finance ministry, according to a government order. The CBDT is the administrative body for the department and it is tasked to collect revenue under various direct tax categories such as personal income tax and corporate tax. According to the order issued by the Appointments Committee of the Cabinet on Wednesday, two Indian Revenue Service (IRS) officers of the 1987 batch -- Pravin Kumar and Harinder Bir Singh Gill -- and two from the 1988 batch -- Sanjai Kumar Verma and Ravi Agrawal -- have been appointed as Members in the CBDT. These officers, currently posted in various regions of the tax department, will fill four positions in the CBDT which have been vacant from September 2021 to June 2023. The CBDT is headed by a chairman and can have a maximum of six Members who are in the rank of special secretary. The two serving Members in the board are

E-commerce operators face problem in GST drive to check fake registration

The pan-India drive against fake GST registration has created problems for e-commerce companies which maintain virtual offices in various states with minimal staff and no books of accounts. Talking to PTI, MakeMyTrip Group Vice President -Taxation Tajinder Singh said that the GST officials should enquire with the head offices with regard to virtual offices before categorising the state registration as a fake entity for non-production of books of accounts. "We maintain virtual offices in states ...in this fake registration drive the field offices have mistook these offices as fake registration, however we were only using these offices for tax payment, there was no ITC flow or fraud being committed using those registration. Because of this, lot of registration were blocked for compliance purpose and that created problems for us," Singh said. Centre and state GST authorities have on May 16 launched a two-month drive to check fake registration under Goods and Services Tax (GST). The fak

Explained: How to minimise capital gains tax on property, equity and MFs

If an investor holds shares or mutual funds for over a year, the profits are long-term capital gains

Over 12k fake entities in GST; CBIC plans biometric authentication

CBIC is working on biometric authentication of risky entities under GST as it looks to crack down on fraudsters who are misusing the PAN and Aadhaar of other people to obtain GST registration, CBIC chief Vivek Johri said. Johri further said that the tax authorities are also discussing some more tightening in the GST return filing system to limit the scope of claiming Input Tax Credit (ITC), when taxes have not been paid by suppliers in the supply chain. The biometric authentication of authorised representatives or directors or partners of a company will be made for new registration applications and existing businesses registered under Goods and Services Tax (GST) if tax officers have a suspicion that the entities are being set up only to fraudulently claim ITC. Also, geo-tagging of all entities is being planned by the officers of the Central Board of Indirect Taxes and Customs (CBIC) to authenticate that the address provided during GST registration is the place from where the entity

Delhi govt collects Rs 1,700 cr in excise duty, VAT in April-June quarter

The Delhi government's Excise department has earned nearly Rs 1,700 crore in excise duty and value added tax in the first quarter of 2023-24, official data showed. In the 2022-23 fiscal, the department had raked in Rs 6,821 crore by selling over 62 crore bottles of liquor. The amount included Rs 5,548.48 crore as excise duty and Rs 1,272.52 crore as value added tax. The Excise department expects the revenues to increase in the next few months with the opening of more liquor shops. "Beer is preferred during the summer months by customers. It has a lower excise duty, which is why the revenue collection in the first half is always relatively lower as compared to the second half of the financial year when whisky sells more," said an official. The city government's Delhi State Industrial and Infrastructure Development Corporation, Delhi Tourism and Transportation Development Corporation, Delhi State Civil Supplies Corporation and Delhi Consumers' Cooperative Wholesale Stores operate 574