During the current fiscal, Department of Revenue, Ministry of Finance has undertaken various initiatives for enhancing the Revenue Collection , easing and formulating the Taxation policy and there by contributing to the Nation building.
The major highlights of the achievements of the Department are as follows
INDIRECT TAX COLLECTIONS :In October 2015, indirect tax revenue (provisional) collections increased by 36.8% compared with collections made in October 2014. Cumulatively, during April-October 2015, indirect tax collections increased by 35.9% over the collections made during the same period last year, while, the target growth rate for 2015-16 is 18.8%. Overall, in monetary terms, the indirect tax revenue (provisional) collections increased to ₹ 3,82,860 crore during April-October 2015 from ₹ 2,81,798 crore during April-October 2014. In the month of October 2015 alone, the collections increased to ₹ 58, 691 crore from ₹ 42, 897 crore in October 2014.Collections on account of Central Excise increased from ₹ 87,588 crore in April-October 2014 to ₹ 1, 47,685 crore in April-October 2015 and thereby registering an increase of 68.6 %. In case of Service Tax, collections increased from ₹ 89,379 crore in April-October 2014 to ₹ 1, 12,727 crore in April-October 2015 and thereby registering an increase of 26.1 %. Collections on account of Customs increased from ₹ 1, 04,831 crore in April-October 2014 to ₹ 1, 22,448 crore in April-October 2015 and thereby registering an increase of 16.8 %
These collections continue to suggest a healthy growth in the underlying tax base
Indirect Tax Collections: April to October 2015 (Rs. in crore)
||Target growth rate for 2015-16 (in %)
||% Growth 2014-15
‘The underlying theme of the “BUDGET 2015-16 indirect tax” proposals was job creation through revival of growth and investment and promotion of domestic manufacturing and ‘Make in India’; ‘Minimum government and maximum governance’ to improve the ease of doing business; Improving the quality of life and public health through Swachh Bharat initiatives; and Stand alone proposals to maximise benefits to the economy.’
I. In order to achieve the above objective of job creation through revival of growth and investment and promotion of domestic manufacturing and ‘Make in India’, the following measures were taken:
- Customs duty on certain inputs was reduced to address the problem of duty inversion.
- Customs duty was also reduced so as to reduce the cost of raw materials required for further manufacture and thereby induce domestic value addition.
- The Special Additional Duty of 4% which is levied on imported goods to counter balance the local taxes levied by States (other than excise duty) was reduced / exempted on certain imported raw materials / inputs so as to address the problem of input tax credit accumulation. For example, all goods except populated PCBs, falling under any Chapter of the Customs Tariff, for use in manufacture of ITA bound goods was fully exempted from 4% SAD.
- Basic customs duty was increased on metallurgical coke from 2.5% to 5% and on commercial vehicles from10% to 20%.
- Excise duty was exempted on inputs required for the manufacture of pacemakers, cast components of wind operated electricity generators and Solar PV ribbon for manufacture of solar PV cells. Also excise duty was reduced on certain inputs required for manufacture of integrated circuit (IC) modules for smart cards and LED drivers and MCPCB for LED lights, fixtures and LED lamps.
- Basic customs duty on specified steel goods was increased to 10% / 12.5%.
- Anti-dumping duty and safeguard duty was imposed on specified goods.
- Basic customs duty and excise duty was exempted on specified bunker fuels for use in Indian Flag vessels for carrying export-import (EXIM) containers, empty containers and domestic containerized cargo.
- Excise duty was exempted on RBD Palm Stearin, Methanol and Sodium Methoxide for use in the manufacture of specified biodiesel for a period upto 31.03.2016.
II. In order to protect the interests of domestic farmers, the following measures were taken:
- Basic customs duty was increased on sugar from 15% to 25% which was later increased to 40%.
- Excise duty was exempted on ethanol produced from molasses generated from cane crushed in the sugar season 2015-16 i.e. 1st October, 2015 onwards, for supply to the public sector oil marketing companies, namely, Indian Oil Corporation Ltd., Hindustan Petroleum Corporation Ltd. or Bharat Petroleum Corporation Ltd., for the purposes of blending with petrol. Also, input tax credit was allowed to manufacturers of such exempted ethanol.
- Basic customs duty was increased on crude edible oils (of vegetable origin) from 7.5% to 12.5% and refined edible oils (of vegetable origin) from 15% to 20%.
- Basic customs duty was increased on ghee, butter and butter oil from 30% to 40% for a period upto and inclusive of the 31st day of March, 2016.
- Basic customs duty of 10% was imposed on wheat which was later increased to 25% for a period up to 31.03.2016.
- The Customs duty concession for import of white butter, butter oil and anhydrous milk fat(AMF) upto TRQ of 15,000 MT at Nil import duty was withdrawn.
III. In order to achieve the objective of minimum government and maximum governance to improve the ease of doing business, the following measures have been taken:
1. 24×7 Customs Clearance: With effect from 31.12.2014, facility of 24×7 Customs clearance for specified imports, namely, goods covered under ‘facilitated’ Bills of Entry and specified exports, namely, factory stuffed containers and goods exported under free Shipping Bills will be made available in 18 sea ports. Similarly,facility of 24×7 Customs clearance for specified imports, namely, goods covered by facilitated Bills of Entry and all exports viz. goods covered by all Shipping Bills was extended at 17 air cargo complexes. This will help in faster clearance of such imported and export goods, reduce dwell time and lower the transaction cost.
2. Single Window Project –Online message exchange: Single Window provides a common platform to EXIM trade to meet requirements of all regulatory agencies (such as Animal Quarantine, Plant Quarantine, Drug Controller, Textile Committee etc) through message exchange Benefits of Single Window Scheme include ease of doing business, reduced costs, enhanced transparency, reduced duplicity and cost of compliance and optimal utilisation of resources. In this direction, with effect from 01.04.2015 an electronic online message exchange facility was established between Customs and the Food Safety and Standards Authority of India (FSSAI) and the Department of Plant Protection, Quarantine and Storage (PQIS) at JNPT (NhavaSheva), ICD, Tughlakabad and ICD, Patparganj, providing for real time seamless online exchange of information, including no objections, with/from these agencies.
a. Other regulatory agencies such as the Animal Quarantine, the Textile Committee, the Drug controller of India and the Wild life authorities are also being brought within the ambit of Single Window Customs Clearance.
3.Special Notified Zone for trading of rough diamonds: Consequent to Hon’ble Prime Minister’s announcement to make India into a hub for trading of rough diamonds, a ‘Special Notified Zone’ was operationalised at Bharat Diamond Bourse at Mumbai. The procedure envisages major diamond mining companies bringing in rough diamonds for display and/or auctions to be conducted within the customs area and re-exporting the unsold consignments.4. Adoption of Digital Signature: To dispense with requirement of physical submission of documents and encourage paper less working, with effect from 01.04.2015 on an optional basis the facility of ‘Digital Signature’ was introduced for importers, exporters, airlines, shipping lines etc. However, for importers registered under the ‘Accredited Client Programme’ (ACP), digital signatures are mandatory with effect from 01.05.2015. Introduction of digital signature will maintain data integrity and reduce cost of compliance.
5. Reduction in mandatory documents for imports and exports: To facilitate trade and to simplify procedures, number of mandatory documents have been reduced and prescribed only three mandatory export and import documents. However, for import and export of special nature under preferential agreements etc., the requisite documents will be required to be submitted.
6. Setting Up of Customs Clearance Facilitation Committee (CCFC): To ensure expeditious clearance of EXIM goods a high level administrative Committee i.e. ‘Customs Clearance Facilitation Committee’ (CCFC) was put in place at every major Customs seaport and airport under the chairmanship of Chief Commissioner of Customs/Commissioner of Customs.
a. The CCFC is mandated to focus primarily on ensuring and monitoring expeditious clearance of EXIM goods in accordance with the timeline specified by the parent ministry/Department concerned; identifying and resolving bottlenecks, if any, in the clearance procedure of imported and export goods; and resolving grievances of members of the trade and industry in regard to clearance process of imported and export goods.
b. Similarly, at Central level, a ‘Central Customs Clearance Facilitation Committee’ has also been set up under the chairmanship of Revenue Secretary to address the issue relating to customs clearance and infrastructure impacting clearance of goods.
7. Rationalisation of penal provision: Penalty provisions in Customs have been rationalized to encourage compliance and early dispute resolution.
8. Withdrawal of Prosecution in certain circumstances: Instructions have been issued providing for withdrawal of prosecution where a noticee was exonerated in the quasi-judicial proceedings and such order has attained finality.
- Reduction in number of levies: Education Cess and Secondary & Higher Education Cess on excisable goods have been subsumed in Basic Excise duty.
- Registration in two days: Registration in Central Excise is to be granted within two working days. Verification of documents and premises to be carried out after the grant of the registration.
- Digital signature and preserving records in electronic form: Legal provisions have been amended to prescribe that a manufacturer may use digital signature on invoices and may preserve records in electronic format. Further, a notification and an instruction was issued to prescribe procedure, safeguards and conditions for using digital signature on invoice and preserving documents in electronic format.
- Electronic payment of duty: The facility of electronic payment of duty was extended to all the Central Excise assessees.
- Time limit for taking CENVAT: Time limit for taking CENVAT Credit of duty/tax paid on inputs and input services was increased from six months to one year.
- Direct despatch of goods: Facility of direct dispatch of goods by registered dealer from seller to customer’s premises was provided. Similar facility has also been allowed in respect of job-workers. Registered importer can also send goods directly to customer from the port of importation.
- Rationalization of penal provisions: Penalty provisions in Central Excise have been rationalised to encourage compliance and early dispute resolution.
- Payment of arrears in installments: Instructions have been issued to allow Chief Commissioners, Commissioners to allow payment of arrears in installments.
- Withdrawal of Prosecution in certain circumstances: Instructions have been issued providing for withdrawal of prosecution with approval of the Chief Commissioner in cases where the adjudication proceeding as well as prosecution were launched on identical grounds and the person concerned was exonerated in the adjudication proceeding on merits.
- Reduction in number of levies:Education Cess and Secondary & Higher Education Cess on taxable services have been subsumed in Service Tax with effect from 01.06.2015.
- Registration in two days: Registration in Service Tax to be granted within two working days.
- Time limit for taking CENVAT: Time limit for taking CENVAT Credit of duty/tax paid on inputs and input services was extended from six months to one year.
- Simplification in procedure for availment of Cenvat Credit in certain cases: For availment of CENVAT credit of service tax paid under reverse charge mechanism, thecondition of having made the payment of consideration to the service provider was done away with.
- Rationalisation of penal provisions: Penalty provisions in Service Tax have been rationalized to encourage compliance and early dispute resolution.
- Digital signature and preserving records in electronic form: Service Tax assessees have been allowed to issue digitally signed invoices and maintain other records electronically.
- Withdrawal of Prosecution in certain circumstances: Instructions have been issued providing for withdrawal of prosecution where a noticee was exonerated in the quasi-judicial proceedings and such order has attained finality.
- If theexport proceeds are not received within the prescribed time period, the exporter has to reverse the Cenvat Credit. Re-credit of such reversed Cenvat credit was allowed, if such export proceeds are received within one year from the specified period.
- To bring certainty in the determination of point of taxation in case of reverse charge mechanism, it was provided that point of taxation will be the payment date or three months from the date of invoice, whichever is earlier.
IV. The objective of improving the quality of life and public health through Swachh Bharat initiatives was achieved by the following measures:
- Clean Energy Cess levied on coal, lignite and peat was increased from ₹ 100 per tonne to ₹ 200 per tonne.
- Concessional customs and excise duty rates on specified parts of Electrically Operated Vehicles and Hybrid Vehicles, available upto 31.03.2015, was extended upto 31.03.2016.
- Excise duty on sacks and bags of polymers of ethylene other than for industrial use was increased from 12% to 15%.
- An enabling provision was made to empower the Central Government to impose a Swachh Bharat Cess on all or certain taxable services at a rate of 2% on the value of such taxable services. The provision has been implemented with effect from 15th November, 2015 and Swachh Bharat Cess at the rate of 0.5% has been made applicable on all services except those which are exempt from Service Tax or are in the negative list.The proceeds from this Cess would be utilized for Swachh Bharat initiatives.
- Service provided by a Common Effluent Treatment Plant operator for treatment of effluent was exempted.
V. Measures adopted for broadening the Tax Base
- excise duty exemption on condensed milk put up in unit containers and peanut butter have been withdrawn.
- The service tax rate was increased from 12% plus Education Cesses to 14%, w.e.f. 1st June 2015.
- Consequent upon review of the Negative List (i.e. services which are not taxable), service tax was levied on the following services:
- Service provided by way of access to amusement facility such as rides, bowling alleys, amusement arcades, water parks, theme parks, etc.
- Service by way of admission to entertainment event of concerts, non-recognized sporting events, pageants, music concerts and award functions, if the amount charged for admission is more than ₹ 500.
- Service by way of carrying out any processes as job work for production or manufacture of alcoholic liquor for human consumption.
- An enabling provision was made to exclude all services provided by the Government or local authority to a business entity from the Negative List. Once this amendment is given effect to, all service provided by the Government to business entities, unless specifically exempt, shall become taxable.
- The General Exemptions in service tax were reviewed and the following exemptions have been withdrawn:
- Specified services of construction, repair of civil structures, etc. when provided to Government except such services provided to,-
a) a historical monument, archaeological site
b) Canal, dam or other irrigation work;
c) pipeline, conduit or plant for (i) water supply (ii) water treatment, or (iii) sewerage treatment or disposal.
- Construction, erection, commissioning or installation of original works pertaining to an airport or port.
- Services provided by a performing artist in folk or classical art form of (i) music, or (ii) dance, or (iii) theater. Exemption will be limited only to such cases where amount charged is upto ₹ 1,00,000 per performance (except brand ambassador).
- Services provided by a mutual fund agent to a mutual fund or assets management company; distributor to a mutual fund or AMC; and selling or marketing agent of lottery ticket to a distributor of lottery.
VI In order to allocate additional resources to infrastructure, the effective rates of Additional Duty of Customs / Excise levied on Petrol and High Speed Diesel Oil [commonly known as Road Cess] have increased from ₹ 2 per litre to ₹ 6 per litre.
VII.As measures to promote public health: excise duty on cigarettes was increased by 25% for cigarettes of length not exceeding 65 mm and by 15% for cigarettes of other lengths. Similar increases have been made on cigars, cheroots and cigarillos. Also, maximum speed of packing machine was specified as a factor relevant to production for determining excise duty payable under the Compounded Levy Scheme presently applicable to pan masala, gutkha and chewing tobacco. Accordingly, deemed production and duty payable per machine per month are being notified with reference to the speed range in which the maximum speed of a packing machine falls.
VIII.In order to give impetus to banking in rural areas under the Pradhan Mantri Jan Dhan Yojana [PMJDY] Scheme,specified services provided by Business Facilitators/Business Correspondents with respect to a Basic Saving Bank Deposit (BSBD)Account covered by Pradhan Mantri Jan Dhan Yojana in a banking company’s rural area branches have been exempted from service tax.
IX. In keeping with the declaration of 21 June as the International Day of Yoga by UN General Assembly, charitable activities relating to advancement of Yoga have been exempted from Service tax.
X. With a view to promote ease of doing business, Cenvat Credit Rules, 2004 have been amended so as to allow credit of Education Cess and Secondary and Higher Education Cess (subsumed under Service tax with effect from 1st June, 2015) paid on inputs/input services and capital goods to be utilized for payment of service tax in specified circumstances.
- During FY 2014-15, the DRI, for the second time hosted the Regional Customs Enforcement Meeting, which was attended by Customs Enforcement Heads of Bangladesh, Bhutan, Myanmar, Nepal and Sri Lanka. The DRI has been awarded for the second year running the United Nations Environment Programme (UNEP)’ Asia Environmental Enforcement Award (AEEA), in recognition of its excellent work in combating environmental crime.This is a prestigious award and reflects the outstanding work done by DRI in preventing the illegal trade in Ozone Depleting Substance (ODS) and smuggling of Red Sanders, a CITES, Appendix II item.
- The DRI, for the first time ever launched an International Operation – “Operation Sesha” in the Asia-Pacific Region (named after Seshachalam Hills in Andhra Pradesh where Red Sanders grows) to combat smuggling of all species of timber including Red Sanders. 18 Customs administrations participated in the Operation. The operation which commenced in October 2014 and ended on 30th May 2015 has been successful. 400 MT was seized in 8 countries. Apart from this a total of 379.733 MT of Red Sanders was seized in India.
- DRI, on behalf of Indian Customs, participated/coordinated several cross border operations covering strategic goods (Cosmo), illegal trafficking in methamphetamine by air passengers (Westerlies 3), counterfeit medicines (Operation PANGEA-VII), which were spearheaded by WCO or INTERPOL. Project Global Shield (PGS), an International effort to counter the illicit diversion and trafficking of precursor chemical, is a regular programme of WCO.
- The Directorate General of Central Excise Intelligence ,DGCEI and the Commissionerates have booked 4945 cases involving a duty amount of ₹ 1545.11 crore during April to October 2015. An additional amount of ₹ 226.38 has been mobilised on account of anti evasion activity of the Department during the above period.
The CBEC has declared 2015 as the Year of Taxpayer Services. The CBEC has been proactive in facilitation of tax payers so as to encourage voluntary compliance. With a view to greater thrust to tax-payer services, it was agreed to create an exclusive Directorate responsible for providing all tax-payer services. To achieve this goal structurally and operationally, CBEC has set up a new Directorate of Tax Payer Services with headquarters at New Delhi, and regional Centres at Six cities.Zonal offices of Customs Excise and Service Tax have a facility of e-helpline, where tax payers can contact the tax officials regarding their queries / information / status of their application etc. All Commissionerates have a ‘Tax Payer Service Centre’ to guide and help the taxpayers. The tax payers can lodge their grievances on CPGRAMS (Centralised Public Grievance Redress and Monitoring Systems), available on www.pgportal.gov.in. Several Commissionerates have been awarded with Sevottam certificates by Bureau of Indian Standards for excellence in public service delivery.
A number of legislative measures were introduced through the Finance (No.2) Act, 2014 and similarly, Finance Act, 2015 to promote growth, investment, manufacturing and job creation. These are expected to improve ease of doing business, bring about clarity in tax laws, and resolve disputes.Measures taken are given below:-
- The levy of Wealth-tax has been abolished with effect from 2016-17 (Assessment Year) for reducing the compliance burden on the tax payers.
- Clarity in taxation of indirect transfer has been brought through Finance Act, 2015. Reasonable restrictions on its applicability have been imposed. Its applicability has been narrowed and linked with the percentage voting power, management control and the quantum of Indian assets. Further, for providing comfort to the investors, a Committee comprising senior officers has been constituted under CBDT with a mandate to vet any new proposed action relating to indirect transfers for the period before 1st April, 2012.
- Income arising to foreign portfolio investors from transactions in securities to be treated as capital gains. This would remove uncertainty in taxation on account of characterization of their income and would encourage flow of funds from FIIs. To facilitate relocation of fund managers of offshore funds in India, the permanent establishment (PE) norms have been modified.
- “Roll Back” provision has been introduced in the Advance Pricing Agreement (APA) regime so that an APA entered into for future transactions is also applicable to international transactions undertaken in previous four years in specified circumstances.
- Range concept has been introduced for determination of arm’s length price in transfer pricing regulations. Use of multiple year data for comparability analysis under transfer pricing regulations has also been allowed. Necessary Rules have been notified.
- The threshold limit for applicability of transfer pricing regulations to specified domestic transactions has been increased from ₹ 5 crore to ₹ 20 crore.
- Taxation regime of Alternative Investment Funds (AIFs) has been streamlined by providing pass through status to all the sub-categories of category-I and also to category-II AIFs governed by the regulations of Securities and Exchange Board of India (SEBI).
- Eligible date for borrowing in foreign currency has been extended from 30.06.2015 to 30.06.2017 for concessional tax rate of 5 percent on interest payments. Tax incentives have been extended to all types of bonds instead of only infrastructure bonds. Period of applicability of reduced rate of tax at 5 percent in respect of income of foreign investors (FIIs and QFIs) from corporate bonds and government securities has been extended from 31.5.2015 to 30.06.2017.
- Rate of tax on royalty and fees for technical services has been reduced (25% to 10%)
- Investment allowance has been allowed at the rate of 15 percent to a manufacturing company that invest more than ₹ 25 crore in any year in new plant and machinery Resident taxpayers have been enabled to obtain an advance ruling in respect of their income tax liability above a define threshold.
- ‘Yoga’ has been included as a specific category of activity in definition of ‘charitable purpose’ and also to provide relief for activities in the nature of business undertaken by genuine charitable organizations subject to the condition that income from such is less than 20 % of total receipts.
- Tax neutrality on transfer of units of a scheme of a Mutual Fund under the process of consolidation of schemes of Mutual Funds as per SEBI Regulations, 1996 has been provided.
- The facility of filing self-declaration of non-deduction of tax by the recipients of taxable maturity proceeds of life insurance policy has been provided.
- Personal Income Tax exemption limit was raised by ₹ 50,000/- that is from ₹ 2 lakhs to ₹ 2.5 lakhs in the case of individual taxpayers below 60 years of age. Exemption limit raised from ₹ 2.5 lakhs to ₹ 3 lakhs in the case of senior citizens that is individuals in the age bracket of 60 years to 80 years.
- Investment limit under section 80C of the Income-tax act has been raised from 1 lakh to 1.5 lakh. This would encourage domestic investment in long term savings.
- Limit of deduction under section 80CCD of the Income-tax act on account of contribution by the employee to National Pension Scheme (NPS) has been increased from ₹ 1 lakh to 1.50 lakh. A deduction of ₹ 50,000/- over and above the limit of ₹ 1.50 lakh has been allowed to any individual who makes a contribution to NPS.
- The limit of deduction under section 80D of the Income-tax act has been increased from ₹ 15,000 to ₹ 25,000 on health insurance premium (in case of senior citizen from ₹ 20,000 to ₹ 30,000). Deduction of expenditure of similar amount in case of very senior citizen who are not eligible to take health insurance has been allowed.
- Under the existing provisions of the Income-tax Act, an individual buying an immovable property from a resident is required to deduct tax but is not required to obtain TAN for depositing the tax so deducted. Relevant provision has been amended for providing enabling power to notify the same facility for an individual purchasing an immovable property from a non-resident.
- Clarification has been issued with respect to the long pending demand relating to the period of stay for the purpose of deciding the residential status of seafarers, who are Indian citizens, going on international voyage.
- A mechanism has been provided to pre-empt repetitive appeals in the same assessee’s case on the same question of law year after year by revenue department.
MEASURES TO CURB BLACK MONEY
- To fulfill the commitment made by the Government to the people of India through the Parliament, the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 has been enacted. Relevant rules [Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Rules, 2015] under the said act have been framed.
- One time compliance opportunity – The Black Money Act also provided a one time compliance opportunity for a limited period [from 1st July, 2015 to 30th September, 2015] to persons who have any undisclosed foreign assets which have hitherto not been disclosed for the purposes of Income-tax. Such persons were allowed to file a declaration before the specified tax authority. The declarants are required pay tax at the rate of 30 percent and an equal amount by way of penalty by 31st December, 2015. Such persons will not be prosecuted under the stringent provisions of the new Act. ₹ 4,147 crore of undisclosed foreign assets have been declared under the one time compliance opportunity.
- The Benami Transactions (Prohibition) Amendment Bill, 2015 has been introduced in Lok Sabha to amend the Benami Transactions (Prohibition) Act (BTPA) 1988. The new amended law will enable confiscation of Benami property and provide for prosecution, thus blocking a major avenue for generation and holding of black money in the form of Benami property, especially in real state.
- The Government is coordination with Swiss Government in getting information of cases investigated by Income Tax Department, confirming its genuineness of Bank accounts etc
- FATCA: India and United states signed Inter governmental Agreement (IGA) to implement the Foreign Account Tax Compliance Act (FATCA) to promote transparency on Tax matters. It is an important milestone in India’s fight against Black Money as it would enable the Indian Tax authorities to receive financial account information of Indians from Foreign countries on an automatic basis.
- The SIT on Black Money submitted made its recommendation before the government. The Government is looking into the details of the same.
- India and Germany to Continue to Exchange Tax Related Information Spontaneously on the Basis of the Existing Agreements; Both Countries Agreed to Explore Other Possibilities of Enhancing Exchange of Information; They Agreed to Resume Negotiations on Partial Revision of the DTAA Between the two Countries with a View to Bring the Provisions Relating to Exchange of Information to International Standards
- Various preventive steps were also taken.It has been decided that quoting of PAN will be required for transactions of an amount exceeding ₹ 2 lakh regardless of the mode of payment. The Government has also enhanced the monetary limits of certain transactions which require quoting of PAN. The monetary limits have now been raised to ₹ 10 lakh from ₹ 5 lakh for sale or purchase of immovable property, to ₹ 50,000 from ₹ 25,000 in the case of hotel or restaurant bills paid at any one time, and to ₹ 1 lakh from ₹ 50,000 for purchase or sale of shares of an unlisted company. In keeping with the Government’s thrust on financial inclusion, opening of a no-frills bank account such as a Jan Dhan Account will not require PAN. Other than that, the requirement of PAN applies to opening of all bank accounts including in co-operative banks.The changes to the Rules will take effect from 1st January, 2016.
AAYAKAR SEWA KENDRA: It is the single window system for implementation of Citizen’s Charter of the Income Tax Department and a mechanism for achieving excellence in public service delivery. All communications as well as returns received in ASK require timely disposal which can be monitored and reviewed. Receipt and distribution and disposal of Dak is done electronically and is monitored at regular intervals. From 01.04.2014 to 31.03.2015, 61 ASKs have been set up. In all 250 Aayakar Sewa Kendras have been set up till 31-03-2015. 56 ASK centers have been granted ISO: 15700 certification and more centers are in the process of obtaining the same.
RESULTS FRAMEWORK DOCUMENT (RFD): In order to equip the department with a tool to measure the progress regarding various schemes, the Results Framework Document (RFD) is drafted every year. The RFD is an agreement between Chairperson, CBDT and Responsibility Centers in CBDT vide which a set of targets is resolved to be achieved as per a matrix of measurable success indicators. The RFD for the year 2015-16 was submitted in March, 2015. The annual review of RFD for F.Y. 2014-15 was completed in May, 2015.
E- GOVERNANCE ACTIVITIES: With modern information technology as a key driver, the CBDT is implementing a comprehensive computerization programme in the Income Tax Department. The programme aims to establish a taxpayer friendly regime, increase the tax-base, improve supervision and generate more revenue for the Government. The key initiatives taken under e-Governance are as under:
- Issue of PAN: .PAN database has shown steady growth in tune with economic progress.The progressive number of PANs allotted till 31st March, 2015 is 22,32,47,190. During the current year (up to 31st March 2015) 1, 86, 04,948 PANs have been allotted.Level -1 integration of PAN and TAN services with E-biz platform has been completed.
- E-filing -filing of Income Tax Returns:
The e-filing portal of the Department is https://incometaxindiaefiling.gov.in. The number of registered users of the e filing portal as on 31st Oct 2015 is about 4.86 crore. During the FY 2014-15, the major new facilities added were “login to e-Filing through net banking”, option to raise grievances and status update related to CPC and “submit Response for the “Outstanding Tax Demand”. In Financial Year, 2014-15, 341.73 Lakh returns were received through e-filing, representing a growth of around 15.14% as compared to the last year. In F.Y.2015-16, 2.7 Crore returns have been received on the e-filing portal till 31/10/2015 registering an increase of 34.35% over the corresponding period of the preceding financial year.
- Centralized Processing Center (CPC) for Income Tax Returns: This project enables Centralized Processing of all e-filed Income Tax returns, and all paper returns also of Karnataka and Goa, at Bengaluru. CPC has processed in excess of 9.25 crore E- Returns till 31st March 2015 against the projected 2.7 crore e-filed returns that CPC was to process in the initial 5 years. CPC has processed 3.07 crore returns of income during Financial Year 2014-15 with a growth rate of 26%, over 2.44 crores processed during Financial Year 2013-14. CPC has achieved a peak processing capacity of 3.78 lakh returns per day. As on 01.11.2015 Central Processing Centre had processed 2.40 crore returns. Out of these (2.40 Cr.) 1.16 crores relate to AY 2015-16 which include 72 lakh refund cases. 99% of these returns have been processed within 90 days. Average processing time has been reduced to 22 days. CPC has progressively resorted to communication with the taxpayers through e-mail and SMS. Till date, CPC has sent around 24.52 Crore digitally signed PDF based intimations by email, around 18.01 Crore SMS alerts and around 2.26 Crore intimations by Speed Post all over the country. Savings due to e-delivery as compared to postage is ₹ 367 crore. To deal with the issue of cleaning and updating of arrear demands, the outstanding demand position in CPC FAS (Financial Accounting System) was made available to field AO’s through the CPC AO Portal and to taxpayers through ‘My Account’ on e-filing website. Outstanding demands aggregating to ₹ 6,98,776/- crore have been hosted as on 31st March 2015 on the CPC Portal / E-Filing Website to enable the field AOs and taxpayers to verify and confirm. CPC has facilitated Tax payers to revert on the demand position by agreeing/disagreeing to the demand through the E-Filing website. CPC and e-filing mark an effort made by department to reduce carbon imprint and “GO GREEN”.
- Refund Banker: The Refund Banker project has enabled system driven process for determination, generation, issue, dispatch and credit of refunds. The refund is directly credited to the bank account of the taxpayer through ECS as soon as it is determined.A web based status tracking facility in collaboration with India Post and National Securities Depository Ltd. (NSDL) is available under the Scheme. Call centre facility with toll free number 1800-42-59-760 is also available for tracking status of refunds issued through the scheme. There has been a steady increase in number and percentage of refunds issued through the Refund Banker scheme. During Financial Year, 2014-2015, the percentage of refunds issued through the scheme was 99.84% of the total number of refunds issued all over India.
- E-Payment of taxes: The E-Payment project has enabled online payment of all direct taxes using net banking facility. Facility of payment of direct taxes has been launched through ATMs of certain banks. In Financial Year 2014-15 the count and amount of e-tax payments was 64.20 % and 87.00% respectively.
- Project Insight: The Income Tax Department has initiated ‘Project Insight’ on Data Warehouse and Business Intelligence (DW&BI) platform to strengthen the non-intrusive information driven approach for improving compliance and effective utilization of information in all areas of tax administration.The Project will integrate enterprise data warehouse, data mining, web mining, predictive modelling, data exchange, master data management, centralized processing, compliance risk management and case analysis capabilities. A Compliance Management Centralized Processing Centre (CMCPC) will also be set up under the Project to handle resource intensive repetitive tasks and ensure optimum resource mobilization within ITD for high skill work. The Project is also envisaged to meet the requirements relating to Foreign Account Tax Compliance Act (FATCA), Common Reporting Standard (CRS) and Automatic Exchange of Information. The project is expected to be rolled out in 2016.
Income Tax Business Application (ITBA)
Income Tax Business Application is the flagship project of the Department for automating all the processes of the Department in the foreseeable future. The project involves re-writing of the existing application, adding yet untouched processes and automating the Human Resource related aspects of the Department. The project is distinct in so far as a single vendor is responsible for hardware application as well as its performance and the performance is calibrated against strict Service Level Agreements. The Project is being rolled out in the current Financial Year. In 2014-15 the following milestones had been achieved:-
- Migration of Data in the data Centre to the new state- of- the- art Hardware form the legacy System
- Roll out of New Email Solution
- Migration of Users as a consequence of Cadre Restructuring
- Development in part of a Technology Training Centre
- Project Name: OLTAS (Online Tax Accounting System)
OLTAS project integrates online tax payments made by tax payers with the running ledger accounts of tax payers maintained by the income tax department for tax credit. OLTAS functions in close coordination with RBI, Agency Banks and TIN (presently being managed by NSDL). The objective of OLTAS project was to do away with the paper trail for tax credit and paper validation system. OLTAS project has been one of the landmark e-governance initiatives undertaken by the department. Under the project, all payments made in bank are uploaded on T+3 basis. Cash payment can be mapped with the bank and the assessee with PAN/TAN irrespective of the place of payment. A country wide network of 30 agency banks and their 13,000 branches including 3 private sector banks are authorized by the RBI for collecting direct tax payments under OLTAS.
AST refers to the existing core module of the Income Tax Department and takes care of Assessment related functions wherefore it interacts with all the modules including AIS (PAN), TDS (Tax Deduction At Source), OLTAS (Online Tax Accounting System), E-filing, CPC-ITR Bengaluru, CIB (including AIR) etc for obtaining vital information for the functioning of all the modules. The System takes care that processing in different systems is coordinated and discrepancies, if any, resolved. Digitization of paper returns and maintenance of online registers as well as processing and post processing activities such as scrutiny, appeal effects, rectification and penalty proceedings are also done in AST.
- Non-filers Monitoring System (NMS):
The Non-filers Monitoring System (NMS) was implemented as a pilot project to prioritize action on non-filers with potential tax liabilities. Data analysis was carried out to identify non-filers about whom specific information was available in AIR, CIB data and TDS/TCS Returns. NMS 4 (for AY 2014-15) 58.95 lakh non-filers with potential tax liabilities. The results of the pilot project are very encouraging and many taxpayers have paid self-assessment tax and filed returns after initiation of the pilot project. A target to add 1 crore new taxpayers during FY 2015-16 has been set by CBDT for the field units and all out efforts are underway to achieve the same. 26.59 lakh new taxpayers have been added up to 20th Sep 2015.
- National Website of the Income Tax Department http://incometaxindia.gov.in
A major initiative to enhance taxpayer services was launched by the Income Tax Department with the unveiling of the new National Website (www.incometaxindia.gov.in). This website is a one-stop-shop for all taxpayers, prospective taxpayers, common citizens, tax professionals, non-residents and even students for accessing all taxpayer services and information in a simplified and user-friendly manner.
- Centralized Processing Cell-TDS (CPC-TDS)
The Centralized Processing Cell for Tax Deduction at source (CPC-TDS) is a technology driven initiative of the Income Tax Department to put in place Non-Intrusive, Non-Adversarial TDS administration in the country. The robust technology platform has been leveraged to provide value added services to more than 15 lakh deductors, 4 crores taxpayers from all over India and abroad and more than 500 officers of the Income Tax Department who are administering the TDS across India.
Centralized Processing Cell (TDS) provides a comprehensive solution to deductors through ‘Tax Deduction, Reconciliation, Analysis and Correction Enabling System (TRACES)’ – India is one of the very few countries to put in place an initiative of this scale for reconciliation of Tax Deducted at Source.
- Electronic Verification Code (EVC) :To facilitate the taxpayers and to provide end-to-end e-enabled services, a system of electronic verification of return of income has been launched by CBDT. A taxpayer can now verify his electronically-filed return through internet banking portal or through Aaadhar-based authentication process. For the small taxpayers, an Electronic Verification Code (EVC) can also be generated through the e-filing website of the Income Tax Department. Persons using this facility will not be required to submit paper-based ITR-V verification form to CPC Bengaluru. About 33 lakh e-returns have been verified through EVC till 07.09.2015.As a result of the drive initiated by CBDT to dispose of grievances, there has been a substantial improvement in the disposal of grievances received through CPGRAMS. From 01.04.2014 to 22.07.2015, the overall disposal rate of the CPGRAMS grievances is 85%.
“E-Sahyog” pilot project was launched as an online mechanism to resolve mismatches in income-tax return through end to end e-service obviating the need to visit income-tax office by the taxpayer. Under this initiative the Department will provide an end to end e-service using SMS, e-mails to inform the taxpayers of the mismatch. The taxpayer will simply need to visit the e-filing portal and log in with their user-ID and password to view mismatch related information and submit online response on the issue. The responses submitted online by the taxpayers will be processed and if the response and other information are found satisfactory as per automated closure rules, the issue will be closed. The taxpayer can check the updated status by logging in to the e-filing portal.
MINIMUM GOVERNMENT MAXIMUM GOVERNANCE:
- A committee under Justice (Retd.) R.V. Easwar has been constituted to recommend measures for simplification of the Income-tax Act, 1961 with a view to reduce litigation and promote ease of doing business.
- The Government has accepted the report of Justice A.P. Shah Committee that Minimum Alternate Tax (MAT) is not applicable to Foreign Portfolio Investors (FPIs). Further, it has also been decided that a foreign company not having a permanent establishment in India shall not be liable to MAT with effect from 01.04.2001.
- Simplification of procedures was made for submission of Form No 15G and Form No 15H for furnishing self declaration for lower deduction or no deduction of tax.
- Notification made of Transfer Pricing Rules to incorporate “range concept” and use of “multi year data” to reduce litigation on transfer pricing issues.
- Phasing out plan of deductions under the Income Tax Act with reduction in tax rates for corporate taxpayers extension of time for submission of comments.
- Notification made of Income Computation and Disclosures Standards (ICDS) under section 145(2) of the Income Tax Act.
- Notification was also made regarding income from off-shore Rupee Denominated Bonds.
- Decision to expedite issue of refunds below ₹ 50,000/- for A.Y. 2013-14 and 2014-15 for cases not selected for scrutiny.
- Monetary limits for filing appeal by the Income Tax Department before Tribunal and High Courts enhanced from ₹ 4 lakh and ₹ 10 Lakh to ₹ 10 lakh and ₹ 20 lakh respectively with retrospective effect.
Source- Press Information Bureau , Government of India, Ministry of Finance, 17-December-2015