The finance minister has announced withdrawal of past demands up to fiscal 2014. Will there be certain conditions attached and by when would it be operationalised?
This will take about two months. The details are being worked out. The only condition is the relief to a single taxpayer will not exceed ₹1 lakh. If an individual demand amount is limited to ₹25,000, the taxpayer can have more than one demand. But the total amount that will be withdrawn per individual will not exceed a lakh.Will this apply even in search cases?
This will apply to all.
FM has spoken about taxpayer services in her speech? What could be next on the table for taxpayer services?
Improving taxpayer services is something which has been the focus of the government for the last five years and shall continue to be so. It is a continuing agenda because there is much to be done. Trust, technology, tax certainty, tax simplification and rationalisation are going to be the core pillars on which we propose to improve taxpayer service.
What are you alluding to in respect of simplification and rationalisation?
I am not alluding to anything specific. There will be various measures as and when they are required. This is only an interim budget. The main budget will be in July and then things can happen, even outside the budget. We keep getting suggestions from various quarters. For example, look at indirect taxes. We reduced customs duty on most of the parts for mobile phones to 10% from 15% as there was a need felt in the interest of simplification and to avoid disputes. There were interpretational issues, so now those were done outside the budget.The intent of the government is always to keep things simple. But in the process, sometimes things happen inadvertently that do not pan out as expected. So that remains to be a focus area. There are some grievances on the technology side in direct taxes. There are some tax demands that are because of technical errors in the IT system. Similarly, how we can improve our risk assessment with use of better artificial intelligence, better machine learning and new technologies so that we are able to pinpoint more correctly those who have avoided or evaded the taxes. Use of technology for improving taxpayer services as well as for better enforcement is very much part of our agenda.
There was an expectation that the 15% rate for manufacturing companies would be extended…
Manufacturing investments take a long time to fructify. That is why in 2019, a four-year window was given and then extended because of Covid. It was not extended last year but before that. So sufficient time had already been given. And we have seen the benefits thereof. Some companies have started coming in and they have used this particular taxation provision; they will get the benefits thereof. Even otherwise, corporate tax rates are very reasonable now at 22%, if one compares globally.
So, this is off the table.
Certainly. This is something which is behind us.
There is a gradual decline in customs and excise duty estimates. Any specific reason for this?
Overall, trade is down globally. In our country, it is up in rupee terms but down in dollar terms. So, in customs we are having a growth rate of only about 2%. That is why there is a downward projection. Similarly, in excise as we stand till December, there is a 5% decrease. The decrease is primarily because of two reasons. There was a duty cut so there is a base effect. Also, the windfall tax is much less, roughly about 50% less than last year, which was ₹25,000-26,000 crore. As a result, we have reduced the revised estimate compared to budget estimates.
There was a lot of discussion around simplifying capital gains. Is that off the table?
As I said, rationalisation and simplification is an ongoing exercise. If there is a need or people see that there is a need for rationalisation, or if it needs to be simplified, then certainly the government takes cognisance of such demands and takes appropriate decisions at an appropriate time.
Companies were expecting clarity on Pillar 2 (rules under the Global Anti-Base Erosion model)…
This is an interim budget. Clarity will be provided in the main budget. We have set up a committee and they are looking into it.
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