In­dia's Fi­nance Min­is­ter slipped on Ser­vice Tax: Chi­dambaram

The Pak Banker - - MARKETS/SPORTS -

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.

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