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Taxation

All-India GST collection at record-high of Rs 1.15 lakh cr in December

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All-India GST collection at record-high

New Delhi, Jan 1: GST collections surged to an all-time high of over Rs 1.15 lakh crore in December as economic activities picked up after lifting of stringent lockdown restrictions.

Mop-up from the Goods and Services Tax (GST), which is levied when a consumable item is sold or a service such as travel booking rendered, in December was 12 percent higher than such receipts in the same month of 2019.

At Rs 1,15,174 crore, the collections were 10 per cent more than the mop-up in the previous month — the biggest growth in monthly revenues in the last 21 months.

In a statement, the finance ministry said the December collections were the highest ever since the implementation of the nationwide tax in July 2017.

The previous best was in April 2019 when Rs 113,866 crore was collected.

This is the third straight month of over Rs 1 lakh crore tax collections and the fourth consecutive month this fiscal when GST collections have outperformed comparable months from 2019, a sign of strong recovery.

The increase in tax collections was due to the “combined effect of the rapid economic recovery post-pandemic and the nationwide drive against GST evaders and fake bills along with many systemic changes introduced recently, which have led to improved compliance,” the statement said.

GST collections, which directly reflect the state of economic activity, had plummeted to a record low of Rs 32,172 crore in April 2020, after the government imposed a nationwide lockdown to curb the spread of coronavirus.

The lockdown, categorised by several agencies as one of the strictest in the world, pummelled the economy as demand dried up and non-essential businesses were shuttered.

That quarter, the economy contracted by the steepest ever 23.9 per cent.

As restrictions were gradually lifted, many parts of the economy were able to spring back into action although output remains well below the pre-pandemic levels.

Commenting on the GST numbers, Shardul Amarchand Mangaldas & Co partner Rajat Bose said the government should provide a breakup of the GST collected through the filing of returns and the tax collected through recovery drives to give a true picture of the extent of economic recovery.

Deloitte India Senior Director Atul Gupta said the recent changes introduced and effectively implemented in GST technology platform like e-invoicing and of matching of supplier invoices along with strict enforcement by revenue authorities in checking fraudulent invoices, has induced an enhanced degree of reporting compliance.

“GST revenue is likely to further grow in the remaining quarter of this financial year and hopefully ease the pressure on the fiscal front in this year of unprecedented economic de-growth,” he said.

In the statement, the finance ministry said 87 lakh GSTR-3B returns were filed for the month of November till Thursday.

During December 2020, revenues from the import of goods were 27 per cent higher and revenues from domestic transactions (including import of services) were 8 per cent higher than the receipts from these sources during the same month of 2019.

The Central GST mop-up stood at Rs 21,365 crore, State GST Rs 27,804 crore, Integrated GST Rs 57,426 crore (including Rs 27,050 crore collected on import of goods) and cess was Rs 8,579 crore (including Rs 971 crore collected on import of goods).

The government has settled Rs 23,276 crore to CGST and Rs 17,681 crore to SGST from IGST as a regular settlement. The total revenue earned by the central government and the state governments after regular settlement in the month of December was Rs 44,641 crore for CGST and Rs 45,485 crore for SGST.

“With major states reporting an increase ranging from 6 to 15 per cent in their GST collections, compared to the same period last year, it is expected that some of the reductions in collections seen in the earlier part of the current fiscal, would be made up by the improving collections in the past three months,” Deloitte India Senior Director M S Mani said

CII Director General Chandrajit Banerjee said GST revenue growth shows that industry is bouncing back to normalcy.

“The increase in the revenue from import of goods indicates that Indian economy is on the fast track of growth now after a long dip due to COVID lockdown,” he added.

GST revenues have topped Rs 1 lakh crore in eight out of 12 months of 2019-20 fiscal. However, in the current fiscal, the revenues have taken a hit due to the COVID-19 pandemic.

Revenue in April was Rs 32,172 crore, followed by May (Rs 62,151 crore), June (Rs 90,917 crore), July (Rs 87,422 crore), August (Rs 86,449 crore), September (Rs 95,480 crore), October (Rs 1,05,155 crore), November (Rs 1,04,963 crore) and December (Rs 1,15,174 crore).

The GST revenue in April-December 2020 was down 14 per cent compared to the same period of the previous year.

The average growth in GST revenues during the October-December quarter has been 7.3 per cent as compared to negative 8.2 per cent during the July-September quarter.

EY Tax Partner Abhishek Jain said the GST collections touching a record high despite that we are not completely out of the pandemic indicates a remarkable recovery in the economy.

“Some of it could also be due to the plugging of revenue leakage by the government on account of fake credits through fraudulent invoicing and introduction of e-invoicing,” he said. — PTI

 

Taxation

Attention J&K Govt employees, others: Important things you need to do before March 31

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Things before March 31

BK News 

As we all know that March is the last month of a financial year, it provides a final chance to make various financial decisions in that particular year. Be it various legal compliances or taking benefit of various income tax saving schemes, March 31 is the last day. Though it is prudent to plan ahead your finances and other important tasks. But, if there is a chance left, one must not miss the last bus.
Important things you need to do before March 31:

Update your Bank Account with KYC

KYC or Know Your Customer details are your credential for a bank or a financial institution. March 31 is the deadline for completing your KYC details with your account. To avoid any disruption in a transaction or get some important due to payment on hold, better to update your KYC ASAP. Submit copies of your documents like address proof, identity proof, PAN card at your bank branch.

Link your Aadhaar with PAN card

Linking your Aadhaar card with your PAN card is now mandatory. The last date for linking the Aadhaar card with the PAN card has been extended up to March 31. If you fail to do so, your PAN card will become inactive after the deadline is over. You won’t be able to make any financial transactions requiring a PAN card. Here are the guidelines for linking your PAN with Aadhaar.

File Income Tax Return

In case you have not filed your income tax return (ITR) for the financial year 2020-21 or assessment year 2021-2022, you have still a week to file it. Not filing your income tax return is considered tax evasion and will have consequences. From losing certain tax deduction benefits to facing penalty or imprisonment, one may have to face any of them or all depending on the severity. Also, make sure to verify your ITR after filing it. Otherwise, your ITR will be considered invalid. If your PAN card and Aadhaar is linked, you can e-verify your ITR within seconds.

Calculate Your Income

As discussed earlier, it is important to plan your finances from the beginning of the financial year. However, better late than never. Therefore, make use of these remaining days of March and calculate your gross income for the current FY from different sources, like salary, income from a business, rent, saving etc. After ascertaining your total income, you can plan your taxation. You can choose the old tax regime or the new tax regime depending on which one suits you the best and benefits you the most. In the new tax regime, most of the exemptions and deductions cannot be availed. But, you will pay the income tax at a lower rate. However, in the old regime, a number of exemptions and deductions (more than 70) are available to save tax legally.

Investing for saving tax

In case you decide to avail of the old tax regime, besides some standard deductions and exemptions, you can also make certain investments and saving plans to availa of a deduction of up to Rs 2 lakh under Section 80C. Your investment in the Public Provident Fund, National Pension Scheme, Sukanya Samriddhi Yojana, ELSS, fixed deposits and availing of life insurance will provide you with the tax-saving benefit. Similarly, availing of health insurance for your family and parents will provide you with additional tax benefits.

Advance Tax

After computing, if your net salary is more than Rs 5 lakh, you should pay the advance tax if the liability is more than 10,000. In case you are a salaried employee, your employer should deduct TDS throughout the year in various instalments. Those people whose net income is less than Rs 5 lakh need not pay income tax. However, they too are required to file an ITR after March 31. In case the extra tax is paid or more TDS has happened, one can claim that back at the time of filing ITR.

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AgriBiz

No cess imposed on Kashmir apples in Union Budget 2021-22

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No cess on Kashmir apples

BK News

Srinagar, Feb 1: A miss read budget announcement sent chill down the spine of Kashmir orchardists soon after Finance Minister Nirmala Sitharam proposed Agriculture Infrastructure and Development Cess on a number of commodities including apples. However, no cess has beeen imposed on Kashmir apples in Union Budget 2021-22.

Here is the story:

As some national news portals listed the names of the commodities and percentage of cess to be imposed on them, a number of people wrote Facebook and Twitter posts that 35% cess on apples will have a negative impact on the apple growers.

“The cess, which will be effect (sic) from February 2, will be charged at the rate of 35% on apples. This developed (sic) has sent shockwaves among apple growers of Kashmir,” wrote a Facebook page, which reports and discusses horticulture-related developments.

Misreading the bifurcation of the custom and agriculture cess on the apples, another, such page wrote, “While they have imposed 35% cess on apples, the customs duty has been reduced to 15% from 50%, which will prove double whammy for the local produce.”

However, the proposed cess on various commodities, the Finance Minister has meant, on the customs or excise duty imposed on the imported goods only. While she had not explicitly mentioned ‘imports’, news portals, particularly business news portals, also failed to explain it, which created confusion among the people, particularly the apple orchardists of Kashmir, who are not aware of the taxation jargon.

It was also missed by the people that no tax is imposed on any kind of agriculture goods produced within the country.

The new cess or AIDC introduced by the FM on a number of commodities including apples, liquor and fuel is imposed on imported goods only.

So this makes clear that no cess or any other tax has been imposed on the Kashmir apples.

In fact, the finance minister went ahead to explain that the AIDC won’t even affect the consumers.  “While applying the cess, we have taken care not to put additional burden on consumers on most items,” the FM said

The AIDC has been proposed on petrol and diesel. It will be Rs.2.5/litre on petrol and Rs.4/litre on diesel. Consequent to the imposition of AIDC, the Basic Excise Duty (BED) and Special Additional Excise Duty (SAED) on petrol and diesel is being reduced so that consumer does not have to bear any additional burden, Sitharaman said.

Similarly, the 35% cess on apples has been imposed after reducing earlier 50% customs duty to just 15%.

AICD on other commodities:

2.5% on gold, silver and dore bars; 100% on alcoholic beverages; 17.5% on crude palm oil; 20% on crude soyabean and sunflower oil; 1.5% on coal, lignite and peat; 5% on specified fertilisers (urea, etc); 40% on peas; 30% on Kabuli chana; 50% on Bengal Gram/Chick Peas; 20% on Lentil (Mosur); 5% on Cotton.

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Taxation

Vehicles over 8 years old to be charged green tax

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Green tax for older vehicles

BK News

Srinagar, Jan 25: Union Minister for Road Transport and Highways Nitin Gadkari has approved a proposal to levy a ‘Green Tax” on old vehicles which are polluting the environment.

The proposal will now go to the states for consultation before it is formally notified, MORTH said in a statement.

Transport vehicles older than 8 years could be charged Green Tax at the time of renewal of fitness certificate, at the rate of 10 to 25 % of road tax.

Personal vehicles to be charged Green Tax at the time of renewal of Registration Certification after 15 years.

Public transport vehicles, such as city buses, to be charged lower Green tax.

Higher Green tax (50% of Road Tax) for vehicles being registered in highly polluted cities.

Differential tax, depending on fuel (petrol/diesel) and type of vehicle will be charged.

Vehicles like strong hybrids, electric vehicles and alternate fuels like CNG, ethanol, LPG etc to be exempted.

Vehicles used in farming, such as tractor, harvestor, tiller etc will be also exempted.

Revenue collected from the Green Tax to be kept in a separate account and used for tackling pollution, and for States to set up state-of-art facilities for emission monitoring.

MORTH said it Green Tax will dissuade people from using vehicles which damage the environment and motivate people to switch to newer, less polluting vehicles.

Green tax will reduce the pollution level, and make the polluter pay for pollution, it claimed.

The minister also approved the policy of deregistration and scrapping of vehicles owned by Government department and PSU, which are above 15 years in age. It is to be notified and will come into effect from April 1, 2022.

It is estimated that commercial vehicles, which constitute about 5% of the total vehicle fleet, contribute about 65-70% of total vehicular pollution. The older fleet, typically manufactured before the year 2000 constitute less than 1 % of the total fleet but contributes around 15% of total vehicular pollution. These older vehicles pollute 10-25 times more than modern vehicles.

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