According to the government’s tax return data for 2015-16, 3.7 crore individuals filed tax returns of which 2.94 crore are either below the income tax limit of Rs 2.5 lakh per annum, or in the first bracket between Rs 2.5 lakh…
Union Finance Minister Arun Jaitley today dropped ample hints that the government was considering taking ‘tough steps’ to ensure more Indians pay taxes and join the mainstream to contribute in the country’s development graph.
“Some tough steps are necessary to make India an increasingly tax compliant society…Profiteering is not a bad word, but unfair enrichment is,” Jaitley said while speaking at the Confederation of Indian Industry’s (CII) annual session here.
The minister, however, didn’t refer specifically to the demonetisation drive which Prime Minister Narendra Modi had in the past cited as one of the reasons for bringing more Indians under the tax net.
According to the government’s tax return data for 2015-16, 3.7 crore individuals filed tax returns of which 2.94 crore are either below the income tax limit of Rs 2.5 lakh per annum, or in the first bracket between Rs 2.5 lakh to Rs 5 lakh.
On Goods and Services Tax (GST) rollout, he said that the new legislation was in the final stage and that new rates under the new regime will not bring any ‘surprise’.
Jaitley said that tax rates won’t be significantly different from the existing rates.
“We are now in final stages of fixing tariffs for different commodities. The formula under which it is being done has also been explained and therefore nobody is going to be taken by surprise, it’s not going to be very significantly different (from present),” he said.
The Minister, however, noted that companies should pass on to consumers the benefit of reduction in taxes under GST which will eliminate the current compounding effect of different central and state levies.
The GST Council, headed by Jaitley and comprising representatives of all the states, is scheduled to meet in Srinagar on 18-19 May to finalise tax rates on different goods and services after unifying at least 10 indirect taxes into the GST.
The GST Council has finalised four rate categories of 5, 12, 18 and 28 per cent after unifying levies like central excise, service tax and VAT.
Fitment will be done by adding the total incidence of current taxation (central plus state levies) and then putting the good or service in the tax bracket closest to it.
Jaitley said that the GST Council has so far had 13 meetings and has never had to resort to voting to decide on any issue.
“And therefore all states representing different political complexions, have all agreed (on GST structure),” he said.
The Finance Minister said that the Council is of the opinion that any benefit accruing from lower tax rates under GST should be passed on to consumers.
“Profit is not a bad word… but unfair enrichment is. And therefore the benefit of reduction in taxation is a benefit that consumers are entitled to. And that’s not a principle that can be seriously contested,” he said.
The GST laws approved by that Parliament have incorporated an anti-profiteering provision to ensure that the reduction of tax incidence is passed on to the consumers.
Source : India TV/ 28 Apr 2017