India's Finance Minister slipped on Service Tax: Chidambaram

As per India's 14th Finance Commission, service tax is not shared with states, Mr. Jaitley had said in the Parliament. Former Finance Minister and senior Congress leader P. Chidambaram has said that his successor Mr. Arun Jaitley "slipped" when he told Parliament on Tuesday that the Centre does not share Service Tax revenues with States.

"[The] FM was wrong… He slipped. All taxes including Service Tax are shared," Mr. Chidambaram said in a text message. Mr. Chidambaram later took to Twitter to refute Mr. Jaitley's response to the first question in the Rajya Sabha for the day in which the Minister said that since, as per the recommendations of the 14th Finance Commission, Service Tax was not shared with States, it would be in their interest for the Upper House to pass the Constitution ( 122nd Amendment) Bill, which is meant for the rollout of the Goods & Services Tax ( GST). "As per the 14th Finance Commission, service tax is not shared with states…The earlier you pass the GST, the better it is for states so that they get a share in the Service Tax," Mr. Jaitley said. Mr. Chidambaram, who was elected to the upper house from the state of Maharashtra, is among the 43 members in the House who took oath on Monday. Some of these are newly-elected, while others were re-elected.

In his efforts to win the support of the congress in the House for the pas- sage of the Bill, Mr. Jaitley has, on a number of occasions, given credit for initiating the long-pending tax reform to his predecessor. Meanwhile, the Central Board of Direct Taxes (CBDT) said on Monday that it put together a database of about nine lakh high-value transactions, of which nearly one lakh that involve purchases or investments exceeding Rs. 1 crore could come under scrutiny for tax evasion. CBDT Chairman Atulesh Jindal told reporters that as part of the efforts to ensure full and timely disclosure of income, the CBDT planned to write to those who undertook these transactions, confronting them with the information. "We would like to give them an opportunity to come clean… We want to say we have this database and we will make them aware of this." The one lakh high-value cases had been prioritised for the purpose, he said. Mr. Jindal said that in the Income Declaration Scheme (IDS) that ends on September 30, black money holders, have a one-time opportunity to come clean. "All those people who have untaxed assets and funds should make their declarations before it is too late."

The database was collected from various sources drawing on the information submitted by agencies such as mutual funds and registrars of property as required under the law. For transactions greater than a certain value, these agencies are required to submit to the CBDT details of those undertaking the transactions. Mr. Jindal said the CBDT introduced paperless application for corporate entities on the E-Biz platform.

The database was collected from various sources drawing on the information submitted by agencies such as mutual funds and registrars of property as required under the law. For transactions greater than a certain value, these agencies are required to submit to the CBDT details, including of the PAN cards of those undertaking the transactions. Mr. Jindal said the CBDT introduced paperless application process for corporate entities on the E-Biz platform as well as for the allotment of PAN to all categories of taxpayers using digital signature certificates. Online allocation of PAN through Aadhaar-based e-signature was rolled out on July 15, he said. Similarly, online applications for TAN through the digital signature certificate for companies were also introduced the same day. There is also a commitment to reduce the time taken for allotment of the TAN and PAN to within a day of the receipt of applications. These measures, he said, were expected to improve India's ranking in the World Bank's ease of doing business ratings.

The Doing Business team of the World Bank Group is on a two-week mission to India for interactions and to validate data for the Doing Business Report (DBR), 2017. A kick-off meeting, chaired by the Additional Secretary (Investment), Department of Economic Affairs, with the team was held here on Monday. The team will also interact with the governments of Delhi and Maharashtra, since the ratings for India reflect largely the ease of doing business in Delhi and Mumbai.