My beloved Members,
TAX HAVENS TO SHARE BLACK MONEY DATA AND HUNT ON FOR ‘UPRIGHT’ OFFICIALS TO MONITOR TAX AMNESTY SCHEME
May is a month of scorching Sun especially in Mumbai. Therefore, I remained indoors and had spare time to ponder over tax issues which I would like to share with you.
Several countries, including tax havens like British Virgin Islands, Cypress and Jersey, etc. have begun sharing information with Indian Authorities. Though the law on Black Money (Undisclosed Foreign Income and Assets) has been gazetted, there is abnormal delay in gazetting the rules and procedures for its implementation. However, relevant information is being given, through the press, by the Tax Dept. Officials confirming that queries on the compliance scheme will be taken cognizance of while releasing the rules and government is planning to publish
detailed FAQs considering the spate of queries that it has received in recent months.
Simultaneously, the officials clarified that one key feature of the scheme will be to ensure that there are only two Commissioner rank officers – one in Mumbai and the other in Delhi – to deal with the scheme. The notified States will come under the jurisdiction of one of the officers. Also, the Dept. has already begun to hunt for officers –
“with highest level of integrity and excellent track record” to ensure that there is tight monitoring of the compliance scheme.
The sources further said that –
“Govt. will also assure individuals opting for the scheme that there will be no fishing expeditions and unnecessary investigation will not be undertaken by the Dept.”
The above clarifications are good enough for both the Dept. and the seekers of proposed Tax Amnesty Scheme.
GOVT. WILL HAVE TO FORGET DIRECT TAX OF Rs. 6.73 LAKH CRORE
The Union Govt. is yet to recover tax arrears of over 8 lakh crore. Worse still, the I-T Dept. says 81% of it is not recoverable and has put it under the
‘Difficult to recover’ category. This means there will be no recovery of Rs. 6.73 Lakh crore. Following is the ‘Table’ showing year-wise outstanding tax demand
|Financial Year||Outstanding tax demand in Rs. (Crore)|
Considering the magnitude of the outstanding demand, Parliamentary Panel wonders why tax defaulters are given a long rope so as to enable them to go scot-free. In this connection, a paper presented during the recently held All India Conference of Chief Income Tax Commissioners stated that the Dept. might recover 19% of Rs. 8 lakh Crore. But there is a rider : even this is going to be a
‘tough task’. So, who are the defaulters? Two-thirds of them owe just Rs. 5,000 crore or below and only Rs. 15,000 crore worth tax is pending with these defaulters. Now, the question that arises is who is responsible for this ugly scenario?
INDIRECT TAX COLLECTIONS UP 37.3% IN MAY 2015
As per Hon’ble FM Jaitley, growth is spread across excise, customs and service categories and tax revenues grew 39.2% for the first two months of the current financial year. Core sector index, which measures the output of 6 infra industries, had shrunk 0.4% in April as compared to previous year. A strong increase in indirect tax collection so far is also considered significant as usually it remains muted due to large outgo of tax refunds. So, the scenario on this front is quite encouraging for the nation.
UPDATE ON GST
Congress President Smt. Sonia Gandhi while addressing the Congress Chief Ministers’ Conference at New Delhi, on 9th June, 2015 demanded that the Centre make major changes to the ‘Goods and Service Tax Bill’. According to her,
“the present Constitution amendment bill to allow for GST has several short-comings that need to be addressed before it finally becomes law.” Meantime, the bill was referred to the select Committee of the Rajya Sabha following opposition demand by the Congress-led block in the budget session. The Centre expects it would be up for passage in the monsoon session. But the Congress assault on the tax bill, led by former PM Manmohan Singh and Sonia, showed the Govt. could have a serious task at hand given the Constitution cannot be amended in the joint sittings of Parliament. Moreover, the amendment bill requires 2/3rd majority of the attendance in each House, a fact that makes Congress indispensable in the Rajya Sabha. Therefore, the passage of GST Bill appears to be difficult unless the Congress supports it. Otherwise, GST cannot be implemented as per the scheduled date 1st April, 2016.
With best wishes and regards,
J. D. Nankani