Vi­nay Pandey

The Economic Times - - Saturday Interview -

What is the progress on GST rules and pro­ce­dures? Rules are be­ing framed. Hope­fully, both the rules and the law should be in place by Fe­bru­aryend, sealed and ap­proved by the GST Coun­cil. By March 31, par­lia­ment should also ap­prove it as state as­sem­blies will take some time.

What about the fit­ment of goods? Where are we on this? Ac­tu­ally, the fit­ment is not such a big ex­er­cise. It has been made quite trans­par­ent with the GST Coun­cil telling every­one that there will be four slabs--5, 12, 18, 28%. For­mula has also been pro­vided that which­ever slab a good is clos­est to, it will be fit­ted in that slab. So, if in­ci­dence of VAT plus ex­cise duty or VAT plus ser­vice tax of 11%, then nat­u­rally you will mi­grate to 12%. If you are close to 13% or 14% you will mi­grate to 12%. If you are 15%, then GST Coun­cil can de­cide. If you are 16%, then you will go to 18% and if you are 19 or 20 or 21, you will come to 18%. Above 21%, we will have to see whether they will go to 18 or go to 28%. But, most of the items above 21 have 14.5% VAT and 12% ex­cise, hav­ing a to­tal in­ci­dence of 26%, so th­ese would move to 28%. There is a con­cern that peo­ple could be ha­rassed over cash de­posits after de­mon­eti­sa­tion. I don’t think that fear is gen­uine fear. Si­mul­ta­ne­ously, while tight­en­ing our tax ad­min­is­tra­tion for pre­vent­ing tax eva­sion, we have also been tak­ing care of in terms of in­for­ma­tion tech­nol­ogy use. First of all, we have never gone be­yond our man­date of tak­ing up more than 1% of cases for scru­tiny. The ques­tion is that be­cause of de­mon­eti­sa­tion there is a large amount of data which we have got and that data peo­ple are fear­ing will be mis­used for ha­rass­ing peo­ple. But if you no­ticed, we have not al­lowed this data to be sent di­rectly to the field author­ity for use. We have put this en­tire data into the e-fil­ing web­site fil­ing of each person in the form of Op­er­a­tion Clean Money. There is an in­ter­ac­tive win­dow and a struc­tured re­sponse can be given in that win­dow. Nor­mally, our num­ber of scru­tiny cases are three lakh, four lakh, now th­ese are 18 lakh cases. And as for the data an­a­lyt­ics we have done, pre­lim­i­nar­ily de­posits are not match­ing sources of in­come. It’s not that all kind of de­posits have been kept there. I sup­pose so--it should. Let us see how the coun­try is pro­gress­ing in terms of us­age of bank ac­counts, us­age of dig­i­tal means of trans­fer. In the (first) IDS (in­come dec­la­ra­tion) scheme we had said in the fi­nance bill we can open cases up to any year. That is the im­pres­sion peo­ple got. That pro­vi­sion we have tried to rem­edy in this. Six years is the nor­mal pe­riod but we will go back 10 years only sub­ject to so many con­di­tions. We should get proof about some prop­erty held in your name or some other name of more than Rs 50 lakh value. Or you have a bank ac­count de­tail which we have found dur­ing that pe­riod in which bal­ance was more than Rs 50 lakh. Only in th­ese two cir­cum­stances the assessing of­fice with the help of a su­pe­rior of­fi­cer can re­open the cases for up to 10 years, four more years than nor­mal. But be­yond 10 years we won’t be able to re­open. Be­sides, this has to be found dur­ing a search and not dur­ing nor­mal as­sess­ment. So it’s done with a lot of safe­guards.

There was talk of a cash trans­ac­tion tax. Was that con­sid­ered? Since it has come from a chief min­is­ters’ com­mit­tee we will look into it, but two things. We need to look into the ex­pe­ri­ence of the pre­vi­ous three years when it was there. Sec­ond, it should not also dis­cour­age peo­ple from de­posit­ing more money in the bank. They might say if I have to pay tax for with­draw­ing cash I would rather keep my cash at home. To-

Will the limit of Rs 3 lakh on cash trans­ac­tions be low­ered over time? Is there any thought of lim­it­ing cir­cu­la­tion of high-de­nom­i­na­tion notes? There is no up­side bud­geted in the per­sonal in­come tax num­bers from the black money scheme. What’s been the re­sponse to the Prad­han Mantri Garib Kalyan Yo­jana (PMGKY)?

There has been some ap­pre­hen­sion about un­bri­dled pow­ers to tax of­fi­cials, for in­stance open­ing of cases go­ing back 10 years.

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