Revenue Secretary Tarun Bajaj on Wednesday said the government is expecting “very, very strong” tax revenue in the current fiscal on the back of better-than-expected corporate sector performance. Acknowledging that higher GST rates are affecting the automotive sector, Bajaj said the GST Council will explore solutions to reduce the very high rates, remove certain items from the tax-exempt category and fix the inverted duty structure.
“When I look at the current first quarter, the results have started coming in and (tax) revenue has started coming in. First advance tax is over, TDS date is coming and going, I see a very strong tax revenue. “It is not that we have increased taxes, or we have become more intrusive and we are coming to you and asking you to pay more taxes…. So, it is a very good thing for the economy,” Bajaj said at the CII annual session here.
The net direct tax collection in the April-June quarter of the current financial year stood at over Rs 2.46 lakh crore as against over Rs 1.17 lakh crore during the corresponding period of the previous financial year (2020-21). The net indirect tax (GST and non-GST) revenue collection in the June quarter of the current fiscal stood at Rs 3.11 lakh crore.
Net GST collection during the quarter stood at over Rs 1.67 lakh crore, which is 26.6 per cent of the budget estimate of Rs 6.30 lakh crore for the entire 2021-22 financial year. Net GST collection includes Central GST + Integrated GST + Compensation Cess. With regard to the Goods and Services Tax (GST), Bajaj said there are many items on which tax rates may need to be changed, but the system needs to be stabilized first.
“On tax rates, I quite agree when you talk about the automotive sector. You are talking about two wheelers, but I would say that on four wheelers we not only charge 28 per cent, but also cess Which is very high and as I see, it will continue for a few more years. “It all has a negative impact on the industry. I accept it, but I don’t know how to solve this issue, said Bajaj.
He further said that though the GST rates have come down at the macro level, there is a need to look for solutions to bring down the rates which are too high. “Largely rates have come down, yes, they may go up in some areas. But we have to look at solutions to reduce rates which are too high and weed out some items which are under exempted items, inverted duty structures, we need to do that and I am sure the coming GST Council When we give this agenda in the meeting, I am sure we will be able to achieve those things,” the secretary said.
Asking private companies to invest more, Bajaj said animal spirit is missing from the corporate sector. “I don’t see that private investment is happening so much… For sustained and long term growth of the economy we want you guys to come forward to start investing, manufacturing, services and kindly tell us what you need from us, Bajaj said at the annual session of CII.
He went on to say, “I have given a message to my officials here that don’t look at every penny. If the economy gives me £10 then it is okay for me to lose a pound. This is the attitude that I would say that the revenue department will work and that But it should work.”
Last week, the government came up with a bill that seeks to repeal retrospective tax demands on companies. The bill proposes to do away with the tax rule, which had given the tax department the power to move 50 years ago, and levy a capital gains levy wherever ownership changed overseas but business assets were in India. The 2012 law was used to impose a total tax of Rs 1.10 lakh crore on 17 entities, including UK telecommunications giant Vodafone, but substantial punitive action was taken only in Cairn’s case.
The Taxation Laws (Amendment) Bill, 2021 seeks to roll back the tax demands made using the 2012 retrospective law to levy tax on indirect transfer of Indian property and refund the amount paid in these cases without any interest. Is. On raising the tax to GDP ratio, Bajaj said raising rates is not a solution to increase tax collection and instead the tax-base has to be expanded to bring more people into the tax net.
He said that unfortunately only a few sections of the people in India are under the tax net and I think this is one of the reasons why most of the taxes are coming from certain classes or categories of taxpayers. “The increase in tax buoyancy in the current year is also a result of some calming steps taken by the IT department,” he said, adding that the government is trying to rope in a large section of the informal sector, or non-corporate and non-salaried. has been Noticing and trying to capture some of their transactions or businesses.
“The fact that we are now reconciling GST returns with ITRs, many of them are paying taxes. That is why I was saying that the tax buoyancy is increasing without raising the tax rates. “I’m really looking forward to expanding that effort. I don’t want to tax the corporate sector which already pays taxes in the country, and contributes a huge chunk of the taxes in the country.”
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