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.