Income tax refunds worth Rs 2.13 lakh crore issued to 2.24 crore taxpayers

Source: The Economic Times, Mar 24, 2021

The Income Tax Department on Wednesday said it has issued refunds worth over Rs 2.13 lakh crore to 2.24 crore taxpayers so far this fiscal. This include Personal income tax (PIT) refunds amounting to Rs 79,483 crore and corporate tax refunds amounting to Rs 1.34 lakh crore during the period between April 1, 2020 and March 22, 2021.

CBDT issues refunds of over Rs 2,13,823 crore to more than 2.24 crore taxpayers between 1st April 2020 to 22nd March 2021. Income tax refunds of Rs 79,483 crore have been issued in 2,21,92,812 cases & corporate tax refunds of Rs 1,34,340 crore have been issued in 2,22,188 cases,” the I-T Department tweeted.

Central govt’s tax collection on petrol, diesel jumps 300% in six years

Source: Business Standard, Mar 22, 2021

New Delhi: Central government’s tax collections on petrol and diesel have jumped over 300 per cent in the last six years as excise duty on the two fuels was hiked, the Lok Sabha was informed on Monday.

The central government collected Rs 29,279 crore from excise duty on petrol and Rs 42,881 crore on diesel in 2014-15 — the first year of office of the Modi government.

The collections on petrol and diesel rose to Rs 2.94 lakh crore in the first 10 months of the current fiscal (2020-21), according to information furnished by Minister of State Anurag Singh Thakur in a written reply to a question in the Lok Sabha.

Together with excise duty on natural gas, the central government in 2014-15 collected Rs 74,158 crore which has gone up to Rs 2.95 lakh crore in April 2020 to January 2021 period.

He said taxes collected on petrol, diesel and natural gas as a percentage of total revenue have gone up from 5.4 per cent in 2014-15 to 12.2 per cent this fiscal.

Excise duty on petrol has been raised from Rs 9.48 per litre in 2014 to Rs 32.90 a litre now while the same on diesel has gone up from Rs 3.56 a litre to Rs 31.80.

Taxes make up for 60 per cent of the present retail price of petrol of Rs 91.17 a litre in Delhi. Excise duty makes up for 36 per cent of the retail price.

Over 53 per cent of the retail selling price of Rs 81.47 a litre of diesel in Delhi is made up of taxes. As much as 39 per cent of the retail price comprises of central excise.

“The total central excise duty (including basic excise duty, cesses and surcharge) was increased by Rs 3 per litre on petrol and diesel with effect from March 14, 2020. It was further revised upwards by Rs 10 per litre on petrol and Rs 13 per litre on diesel with effect from May 6, 2020,” Thakur said.

These increases took away the gain that would have accrued to consumers from a sharp drop in international oil prices.

The hike in excise duty is similar to the increase in taxes the government did between November 2014 and January 2016.

Over nine instalments, duty on petrol rate was hiked by Rs 11.77 per litre and that on diesel by 13.47 a litre in those 15 months.

The government had cut excise duty by Rs 2 in October 2017, and by Rs 1.50 a year later. But it raised excise duty by Rs 2 per litre in July 2019. “The excise duty rates have been calibrated to generate resources for infrastructure and other developmental items of expenditure keeping in view the present fiscal position,” he added.

Excise duty collection jump 48 pc this fiscal on record hike in taxes on petrol, diesel

Source: Financial Express, Jan 17, 2021

While the pandemic pummelled tax collection across the board, excise duty mop-up jumped 48 per cent in the current fiscal on the back of a record increase in taxes on petrol and diesel, that more than made up for the below normal fuel sales.

Excise duty collection during April-November 2020, was at Rs 1,96,342 crore, up from Rs 1,32,899 crore mop-up during the same period in 2019, according to data from the Controller General of Accounts (CGA). This despite the fact that over 10 million tonnes less diesel – the most used fuel in the country – was sold during the eight months period.

Diesel sales during April-November 2020, stood at 44.9 million tonnes as compared to 55.4 million tonnes a year back, according to data from the oil ministry’s Petroleum Planning and Analysis Cell (PPAC).

Petrol consumption too was lower at 17.4 million tonnes, compared to 20.4 million tonnes during April-November 2019. While Goods and Services Tax (GST) apply on most products since its introduction in 2017, oil products and natural gas has been kept out of its preview.

Excise duty, which accrues to the centre, and VAT that goes to the state government, are levied on their sale.

Industry sources said the jump in excise duty was primarily because of a record increase in taxes on petrol and diesel during March and May last year.

The government had raised excise duty on petrol by Rs 13 per litre and that on diesel by Rs 16 a litre in two tranches to mop up gains arising from international crude oil prices falling to a two-decade low. With this, the total incidence of excise duty on petrol rose to Rs 32.98 per litre and that on diesel to Rs 31.83 a litre. Petrol costs Rs 84.70 a litre in Delhi and a litre of diesel comes for Rs 74.88.

In full 2019-20 fiscal (April 2019 to March 2020), excise collection totalled Rs 2,39,599 crore, according to CGA. Central excise duty makes up for 39 per cent of petrol and 42.5 per cent of diesel. After considering local sales tax or VAT, the total tax incidence in the price is about two-third of the retail rate.

The excise tax on petrol was Rs 9.48 per litre when the Modi government took office in 2014, and that on diesel was Rs 3.56 a litre. The government had between November 2014 and January 2016, raised excise duty on petrol and diesel on nine occasions to take away gains arising from plummeting global oil prices.

In all, duty on petrol rate was hiked by Rs 11.77 per litre and that on diesel by 13.47 a litre in those 15 months that helped government’s excise mop up more than double to Rs 2,42,000 crore in 2016-17, from Rs 99,000 crore in 2014-15.

The government had cut excise duty by Rs 2 in October 2017, and by Rs 1.50 a year later.

But it raised excise duty by Rs 2 per litre in July 2019. It again raised excise duty on March 2020, by Rs 3 per litre each. In May that year, the government hiked excise duty on petrol by Rs 10 per litre and that on diesel by Rs 13 a litre. While basic excise duty on crude is not so significant, it is ad valorem (a certain percentage of value) on ATF at 11 per cent and on natural gas-compressed 14 per cent. In case of an ad valorem system, earnings happen only if the product price goes up.

According to CGA, over tax revenue of the government is down 45.5 per cent at Rs 688,430 crore during April-November. For the full 2020-21 fiscal (April 2020 to March 2021), the government had budgeted Rs 16.35 lakh crore tax revenue. Corporation tax mop-up is down 35 per cent at Rs 185,699 crore and income tax collection is 12 per cent lower at Rs 235,038 crore, the CGA data showed.

CBDT relaxes requirement of remunerating fund managers of offshore funds

Source: Business Standard, Jan 16, 2021

Mumbai: The Central Board of Direct Taxes (CBDT) has relaxed the requirement of remunerating fund managers of certain offshore funds because of the amended Rule 10V for availing the special taxation regime under Section 9A.

The Section provides for a special taxation regime in respect of certain offshore funds in the context of their fund managers being located in India.

The CBDT has stated that for financial years 2019-20 and 2020-21 in cases where the remuneration paid to the fund manager is lower than the amount of remuneration prescribed under sub-rule (12) of Rule 10V, but is at arm’s length, there is no need to take CBDT nod for that lower amount to be the amount of remuneration.

However, the board’s permission will be required from FY21-22 if fees paid to the manager are lower than the prescribed amount.

The Finance Act 2019 had replaced one of the conditions requiring an arm’s length remuneration to be paid to the eligible fund manager for performing fund management activities, with a minimum remuneration to be paid under a prescribed methodology, which became effective from April 1, 2019.

The notification provided a window for applicants to seek approval from the board when the amount of remuneration is lower than prescribed. “Since it was not possible to comply with the provisions for FY19-20 and FY20-21, the CBDT has issued a notification stating that the remuneration paid by the fund manager, if lower than the amount prescribed shall be sufficient if it is at arm’s length for FY19-20 and FY20-21,” said Sunil Gidwani, Partner, Nangia Andersen.

5% more income tax returns filed this year

Source: The Economic Times, Jan 12, 2021

NEW DELHI: Income tax returns filed this year have risen by about 5 per cent to nearly 6 crore as more businesses and entities filed annual income statements.

Over 5.95 crore income tax returns (ITRs) for the fiscal year ended March 31, 2020 (2019-20) were filed by January 10, the Income Tax Department said.

The ITR filing deadline for individuals ended on January 10 while for companies it is till February 15.

The tax department in a tweet said 5.95 crore ITRs for Assessment Year 2020-21 were filed till January 10, 2021, as compared to 5.67 crore ITRs filed for the previous Assessment Year by September 10, 2019.

The total returns for 2019-20 are 33.35 lakh higher than the previous year as total ITRs filed stood at 5.61 crore on the last date which was August 31, 2019.

“We gratefully acknowledge the efforts of our taxpayers & tax professionals,” it said sharing the data of ITRs filed for AY2020-21 up to January 10, 2021.
An analysis of the data showed that filing of tax returns by individuals for 2019-20 has slowed in the current year, while filing by businesses and trusts has increased.

Over 2.99 crore ITR-1 were filed till January 10 this year, lower than the 3.11 crore filed till September 10, 2019.

ITR-1 form is filed by resident individuals having income less than Rs 50 lakh in a year.

Over 1.49 crore ITR-4 were filed till January 10, as compared to 1.29 crore filed till September 10, 2019.

Returns in ITR-1 Sahaj are filed by individuals whose total income does not exceed Rs 50 lakh, while form ITR-4 Sugam is meant for individuals, Hindu Undivided Families (HUFs) and firms (other than Limited Liability Partnership) having a total income of up to Rs 50 lakh and having presumptive income from business and profession.

Over 46.12 lakh ITR-2 (filed by people having income from residential property, capital gains and foreign assets) were filed till January 10. ITR-5 (filed by LLP and Association of Persons) filings stood at 10.50 lakh, while ITR-6 (by businesses) filings were at 4.72 lakh.

Last year, ITR-6 filings till September 10, 2019, were 49,398. ITR-5 filings were 5.89 lakh.

ITR-7 (filed by persons having income derived from property held under trust) filings stood at 1.46 lakh till January 10, 2021, as compared to 65,298 last year.

Due to difficulties faced by taxpayers owing to the pandemic, the government pushed the deadline for filing ITR thrice — first from the normal deadline of July 31 to November 30, 2020, and then to December 31, 2020.

On December 30 last year, the government extended the deadline to file ITR for individuals by 10 days to January 10 and for businesses till February 15.

The Income Tax Department on Monday rejected demand for further extension of the deadline for filing returns where audit is required beyond February 15.

“CBDT passes order u/s 119 of Income-tax Act, 1961 in F No. 370153/39/2020-TPL dt 11th January, 2021, disposing off the representations for extension of due date for filing of Audit Report u/s 44AB, in compliance with the order of hon’ble Gujarat High Court dt 8th January, 2021,” the department had said in a tweet.

This was in response to the Gujarat High Court order dated January 8 in the case of the All India Gujarat Federation of Tax Consultants versus Union of India directing the finance ministry to look into the issue of extension of due dates for filing of audit report under Section 44AB of the Income Tax Act.

As per the provisions of the Act, the due date for filing of the audit report under Section 44AB is one month prior to the due date of filing of ITR which is January 15, 2021.

Over five crore Income Tax Returns for the 2019-20 fiscal year filed till January 4

Source: The Economic Times, Jan 05, 2021

NEW DELHI: Over 5 crore income tax returns (ITRs) for fiscal year 2019-20 have been filed till January 4, the Income Tax Department said on Tuesday. The government has extended the ITR filing deadline for individuals till January 10, and for companies till February 15.

“Over 5.01 crore Income Tax Returns for AY 2020-21 have already been filed till 04th of January, 2021,” the Income Tax Department said in a tweet.

The deadline for individuals to file ITRs for 2018-19 was August 31, 2019 and over 5.63 crore ITRs were filed.

An analysis of the data showed that filing of tax returns by individuals for 2019-20 has slowed in the current year, while filing by businesses and trusts have increased.

Over 2.7 crore ITR-1 have been filed till January 4, lower than 3.09 crore filed till September 4, 2019.

With regard to ITR-4, it said, 1.04 crore returns have been filed till January 4 as compared to 1.28 crore filed till September 4, 2019.
Returns in ITR-1 Sahaj are filed by individuals whose total income does not exceed Rs 50 lakh, while form ITR-4 Sugam is meant for individuals, Hindu Undivided Families (HUFs) and firms (other than Limited Liability Partnership ) having a total income of up to Rs 50 lakh and having presumptive income from business and profession.

Over 38 lakh ITR-2 (filed by people having income from residential property) were filed till September 4, 2019. ITR-5 (filed by LLP and Association of Persons) filings stood at 8.30 lakh, while ITR-6 (by businesses) filings were at 4.03 lakh.

ITR-7 (filed by persons having income derived from property held under trust) filings stood at 1.21 lakh till September 4, 2019.

Over five crore Income Tax Returns for the 2019-20 fiscal year filed till January 4

Source: The Economic Times, Jan 05, 2021

NEW DELHI: Over 5 crore income tax returns (ITRs) for fiscal year 2019-20 have been filed till January 4, the Income Tax Department said on Tuesday. The government has extended the ITR filing deadline for individuals till January 10, and for companies till February 15.

“Over 5.01 crore Income Tax Returns for AY 2020-21 have already been filed till 04th of January, 2021,” the Income Tax Department said in a tweet.

The deadline for individuals to file ITRs for 2018-19 was August 31, 2019 and over 5.63 crore ITRs were filed.

An analysis of the data showed that filing of tax returns by individuals for 2019-20 has slowed in the current year, while filing by businesses and trusts have increased.

Over 2.7 crore ITR-1 have been filed till January 4, lower than 3.09 crore filed till September 4, 2019.

With regard to ITR-4, it said, 1.04 crore returns have been filed till January 4 as compared to 1.28 crore filed till September 4, 2019.
Returns in ITR-1 Sahaj are filed by individuals whose total income does not exceed Rs 50 lakh, while form ITR-4 Sugam is meant for individuals, Hindu Undivided Families (HUFs) and firms (other than Limited Liability Partnership ) having a total income of up to Rs 50 lakh and having presumptive income from business and profession.

Over 38 lakh ITR-2 (filed by people having income from residential property) were filed till September 4, 2019. ITR-5 (filed by LLP and Association of Persons) filings stood at 8.30 lakh, while ITR-6 (by businesses) filings were at 4.03 lakh.

ITR-7 (filed by persons having income derived from property held under trust) filings stood at 1.21 lakh till September 4, 2019.

India’s losing Rs 75,000 crore in taxes every year due to tax abuse by MNCs, individual evasion

Source: The Economic Times, Nov 21, 2020

NEW DELHI: India is losing over USD 10.3 billion (about Rs 75,000 crore) in taxes every year owing to global tax abuse by MNCs and evasion by private individuals, a report said on Friday. The State of Tax Justice report said globally countries are losing a total of over USD 427 billion in taxes each year to international corporate tax abuse and private tax evasion. This is costing countries altogether the equivalent of nearly 34 million nurses’ annual salaries every year — or one nurse’s annual salary every second.

With regard to India, the report said USD 10.3 billion, or 0.41 per cent of the USD 3 trillion GDP, is lost in taxes every year to global tax abuse.

Of this, over USD 10 billion is lost to tax abuse by multinational corporations (MNCs) and USD 200 million to tax evasion committed by private individuals.

The social impact of the lost tax is equivalent to 44.70 per cent of the health budget and 10.68 per cent of education spending. It also equals paying yearly salaries of over 42.30 lakh nurses.

It further said India is most vulnerable to illicit financial flows in the form of outward FDI and listed Mauritius, Singapore and the Netherlands as the trading partners which are most responsible for this vulnerability.

The State of Tax Justice report has been published by the Tax Justice Network, together with global union federation Public Services International and the Global Alliance for Tax Justice.
The report highlights the state of global tax abuse and governments’ efforts to tackle the menace.

CBIC gives partial relief to companies from compulsory e-invoicing

Source: Business Standard, Oct 01, 2020

New Delhi: The indirect tax board has given partial relief to companies from compulsory e-invoicing that will kick off from Friday.

The Central Board of Indirect Taxes and Customs (CBIC) said in a statement that the companies will not attarct any penalty if they move goods without e-invoicing, provided that they get invoice reference number (IRN) for such invoices within a month of the date of invoice. The relief has been provided for the month of October only. The GST Council has made e-invoicing compulsory for companies having an annual turnover of over Rs 500 crore. The deadline has been extended a couple of times. Although it was to be implemented from April, it was deferred till October. Companies had earlier said that there will be a disruption in their operations if e-invoicing is made compulsory for them from Friday. They demanded that e-invoicing be voluntary for three months before opening it to all those with an annual turnover of over Rs 500 crore.

Indian cos with foreign units fear domestic tax implications

Source: The Economic Times, Sept 29, 2020

Mumbai: Many Indian companies with foreign subsidiaries whose directors or senior executives are stranded in India due to the pandemic are now worried that they may have domestic tax implications under the place of effective management (PoEM) rule. Under the PoEM regulations, overseas subsidiaries could be treated as domestic entities for tax purposes if they are controlled and managed from India. In most cases, senior executives would travel to other countries where the subsidiaries are located, for some time every year, especially for board meetings. However, amid Covid-19, many executives and directors are now unable to travel – resulting in a situation where tax officials could construe that the decisions concerning the companies were made in India.

As it stands today, the Indian government has not announced any relaxations under PoEM for such cases, tax experts said. “In this ‘exceptional’ Covid scenario, an unintended side effect of the lockdown might trigger PoEM presence of foreign companies when their directors/managers, i.e. the key decision makers, are in India,” said Amit Maheshwari, a partner of CA firm Ashok Maheshwary & Associates. “The IT department can consider these companies as residents in India. While the OECD (Organisation for Economic Co-operation and Development) categorically states that this exceptional period should not be considered while determining PoEM, a relaxation from the CBDT (Central Board of Direct Taxes) on the same lines is very necessary to address the same,” Maheshwari added.

The government had introduced the PoEM framework in 2018, to tax the income of Indian companies’ foreign subsidiaries. Amid the pandemic, many companies are holding meetings over videoconferencing applications to take decisions. This raises questions over the taxability of their global income. “For many companies, the decision makers are stranded in India for a long time and the fear is that they may have to pay taxes on their global income in India or foreign companies may become resident under PoEM,” said Paras Savla, a partner at tax advisory firm KPB & Associates.

The tax applicable on the global income of such companies could be as high as 42%, said tax experts. Worse, most of the companies would have to cough up this amount in the coming months and pay that as advance tax.

The problem has occurred for both multinationals as well as individuals. ET had first written on April 11 that for several rich Indians, who shuffle between countries to avoid staying in India beyond the stipulated time to pay tax here, Covid-19 has come as a double blow, as they may have to pay tax in India. For several multinationals too this could create problems, as the tax department could look at whether they could be taxed on their entire income in India.

Industry trackers said the tax department could trigger PoEM despite a recent directive from the OECD that asks countries to provide relief from regulations due to the Covid-19 situation. Tax experts said while some of the larger companies might not face any problems from it, smaller companies, that do not have an independent board or other things to establish independence, would face issues.