Tax. (IANS Infographics)
A fund-starved government will be better off looking at increased collections fuelled by an economic recovery and improved technology driven enforcement rather than through the introduction of new taxes, a KPMG survey showed on Wednesday.
According to the pre-budget survey 2021-22, only 2 per cent of the respondents feel that raising taxes would be the solution to mobilise additional revenue for the government that sees an increase in its expenditure due to the pandemic.
A majority (20 per cent) held that the Government’s revenue needs can be met through increased collections fuelled by an economic recovery as well as improved technology driven enforcement (49 per cent).
The KPMG survey conducted in January 2021 has tried to capture the expectations of all important stakeholders on various tax aspects of the budget. In all, 250 respondents across sectors participated in the survey.
Despite the expectation that government may not raise taxes, the survey has brought out that a smaller number of respondents (29 per cent) expect that a new Covid-19 cess may be imposed in the Budget.
When it came to some of the measures the government could adopt to provide relief to the salaried class, some respondents (74 per cent) felt that an enhancement in the standard deduction on salary income from the existing Rs 50,000 should be considered.
As to what the government could do more to help resolve disputes, a whopping (77 per cent) of respondents felt that a mediation scheme should be introduced in the Budget to enable negotiated settlements of tax disputes.
AS many as 38 per cent respondents felt that the Advanced Pricing Agreement (APA) programme had been effective in pre-empting/resolving key transfer pricing controversies. About 40 per cent respondents felt that the introduction of the General Anti-Avoidance Rules (GAAR) and the implementation of the Multilateral Instrument (MLI) could lead to increase in tax disputes.
Given the financial impact of the pandemic, a majority of respondents (47 per cent) expect an increase in the deduction with respect to provisions made towards Non-Performing Assets (NPA) by banks and NBFCs. This would provide much needed relief to the banks and NBFCs, who are bracing for increased delinquencies, on account of the pandemic.
A toral of 43 per cent respondents felt that a specific carve out for unlisted shares and securities from tax collected at source (TCS) was also warranted.
Asked if respondents felt that the Goods and Services Tax (GST) regime was getting simplified over the last three years, the response was divided. While 45.97 per cent believed that it was simplified, 41.71 believed otherwise. This could be due to multiple reasons such as various notifications, circulars being issued on a regular basis, number of increased compliances for multiple registrations, stringent provisions for credits availment which, in turn, leads to additional costs and time investments in the business.
Nearly two-thirds respondents (62 per cent) were comfortable with the digital compliance system introduced for GST. A large percentage of respondents (64 per cent) believe that CBIC should introduce customs assisted assessment for Micro, Small and Medium Enterprises (MSMEs)
Lastly, in line with the need to provide a level playing field to provide a level playing fields for Indian companies to access overseas capital markets and facilitate a better valuation for equity shares, 70 per cent respondents said that the government should announce provisions to facilitate a regime for direct overseas listing of Indian companies.
Commenting on the findings of the survey, Sunil Badala, Partner and Head, Financial Services- Tax, KPMG in India, said: “Our Pre-Budget Survey indicates that relief for the salaried class by way of an enhancement in the standard deduction on salary income from existing limit of Rs 50,000 is highly awaited. Corporates are also hopeful that dispute resolution will continue to be a priority for the Government; and that negotiated settlements of tax disputes will be enabled. Overall, we notice that the respondents do not expect introduction of any new taxes including Covid-19 cess.”
Petrol and diesel prices unchanged for 3rd straight day
The rise in the prices of petrol and diesel has paused for the last three days as oil marketing companies (OMCs) have decided to wait and watch the developments on global oil market before finalising their India retail strategy.
The OMCs kept the pump price of petrol and diesel unchanged on Tuesday. With this, petrol continues to be priced at Rs 91.17 a litre and diesel Rs 81.47 a litre in the national capital.
Across the country as well, petrol and diesel prices remain unchanged.
Sources in OMCs said that price pause on Tuesday followed subdued movement in product price in global markets. The crude oil, which has been on fire for the last couple of weeks, has also shown some downward movement lately, staying at less than $63 a barrel now.
Petrol and diesel prices have been rising continuously since February 9. In the 14 increases since then, prices have gone up by Rs 4.22 per litre for petrol while diesel rate has risen by Rs 4.34 a litre in Delhi.
The increase in the previous weeks has taken petrol past the historic high levels of Rs 100 a litre in several cities across the country.
In Mumbai, petrol prices is just Rs 2.4 per litre short (Rs 97.57 a litre) of touching the three-figure mark of Rs 100 per litre for the very first time ever. Diesel prices in the city are closing on Rs 90 a litre (Rs 88.60 a litre).
In all the other metros, petrol is over Rs 90 a litre-mark, while diesel is well over Rs 80 a litre. Premium petrol had crossed Rs 100 per litre mark in several cities in Rajasthan, Madhya Pradesh and Maharashtra a few days back.
Since fuel prices are benchmarked to a 15-day rolling average of global refined products’ prices and dollar exchange rate, pump prices can be expected to remain northbound over the next few days even if crude price stabilises.
Petrol and diesel prices have increased 26 times in 2021 with the two auto fuels increasing by Rs 7.46 and Rs 7.60 per litre, respectively, so far this year.
Oil company executives said that petrol and diesel prices may increase further in the coming days as retail prices may have to be balanced in line with global developments to prevent the OMCs from making a loss on sale of auto fuels.
Government-NUSI ink MoUs for Rs 225 Cr benefits to seafarers
In a third major achievement in 3 months, the National Union of Seafarers of India (NUSI) signed six memorandums of understanding (MoUs) with the Centre to extend various benefits worth Rs 225-crore to the 4,00,000 Indian seafarers across all categories, a top unionist said here on Tuesday.
The MoUs were signed between NUSI General Secretary Abdulgani Y. Serang and Director-General of Shipping Amitabh Kumar ahead of the crucial Maritime India Summit (MIS) starting Tuesday, and as part of the NUSI’s 125th anniversary celebrations.
“For the first time in Indian maritime history, the six MoUs have been signed for the welfare, training, medical, education and other requirements of the sea-farers,” Serang told IANS.
The scope of the MoUs includes: Financial assistance for Covid-19 vaccination to all seafarers, sponsorship to seafarers or their families to study at the Indian Chapter, World Maritime University in Sweden, Training and Skill Enhancement to seafarers free of cost.
Other important areas covered are: Medical and education assistance to seafarers and their families, and also educational help to kin of retired/deceased seafarers, said NUSI Spokesperson Sunil Nair.
The NUSI claimed that it was their third major milestone for the seafarers in the past three months at the height of the pandemic when the Indian and global maritime industry suffered hugely.
In December, the NUSI and FSUI clinched an agreement with Indian National Shipowners Association (INSA) for a hefty 40 per cent wage hike with retrospective effect to all seafarers.
In January, the government agreed to extend the provident fund, gratuity, and pension to all ranks of seafarers serving on both Indian or foreign flag ships, after years of struggle by NUSI.
However, with the efforts of Shipping Minister Mansukh Mandaviya and Prime Minister Narendra Modi, the demands have been accepted which will go a long way to ensure the financial, medical and academic well-being of the seafarers and their families after they retire, the NUSI leaders said.
Shipping Corp shares up 15% as government gets multiple EoIs
Shares of Shipping Corporation of India Ltd surged over 15 per cent on Tuesday as its disinvestment process gathered momentum with the government receiving multiple Expressions of Interest (EoI) for the privatisation of the company.
Around 12 p.m., its shares on the BSE were trading at Rs 120.15, higher by Rs 16.45 or 15.86 per cent from its previous close.
Taking to Twitter, Tuhin Kanta Pandey, the Secretary for Department of Investment and Public Asset Management (DIPAM) on Monday said: “Multiple Expressions of Interest have been received for privatisation of Shipping Corporation of India Limited. The transaction will now move to the second stage.”
The Union government proposes to sell its entire shareholding of 63.75 per cent in the listed entity to a buyer that will take over the company with full management control.
The government expects to complete the privatisation in the coming financial year. Presenting the Union Budget for FY22, Finance Minister Nirmala Sitharaman had said that all the announced disinvestment processes will be completed during the upcoming fiscal.
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