Direct Tax

Cairn, Vodafone Eligible for India Tax Amnesty, Official Says

Vodafone Group Plc and Cairn Energy Plc are eligible to settle a tax dispute with India’s government under a new amnesty program, a senior government official said. “The companies will need to pay their taxes by March to benefit from the interest and penalty waivers under the program,” Pramod Chandra Mody, chairman of the CBDT, said in an interview Tuesday. Vodafone’s dispute relates to its USD 11 billion acquisition of a 67% stake in the mobile-phone business owned by Hutchison Whampoa in 2007, while Cairn Energy is contesting a big tax bill of USD 1.6 billion along with interest and penalties for a transaction that took place in 2006. Finance Minister Nirmala Sitharaman has recently proposed an amnesty program to pare an estimated 4,83,000 direct tax cases pending in various courts.

The companies had previously rejected a similar offer in 2016 and instead sought to settle the disputes through the international arbitration mechanism.

E-commerce entities approach the government for clarifications

The government proposed a new levy of 1% TDS (tax deducted at source) on e-commerce transactions. Both Flipkart and Amazon have said 1% TDS on gross sales would hurt small-scale sellers the most.

"We have highlighted these concerns as well as the increased cost of compliance for MSMEs/sellers and the e-commerce industry to the government," a Flipkart spokesperson said in an email.

An Amazon spokesperson too informed that sellers had voiced concerns over the 1% TDS for which it has sought clarification from the government.

Tax authorities profiling thousands of deviant businesses every month: Official

“The profiling of taxpayers is based on the tax evasion risk they pose, and such abuse of the system needs to be stopped,” said the Revenue Secretary at a post-budget, industry interaction in Chennai. He mentioned that the authorities are combing through data collected on income tax, GST, export, and import transactions and are matching information from different sources to find the source of revenue leakage. The revenue secretary also said that in the case of the direct tax dispute resolution scheme announced in the budget, settlement of the cases would be done through an electronic interface. Citizens should avail of the scheme in as many cases as possible.

Indirect Tax

39th GST Council meeting to be held on 14 March 2020

The 39th GST Council meeting is to be held on 14 March 2020. It is expected that the meeting’s agenda will be dominated by the GST portal glitches being faced by taxpayers even after almost three years of GST implementation. The issue gains significance given the new return filing mechanism expected to be implemented from April 2020.

[excerpts from the Business Standard]

Measures to further boost the GST revenues under consideration

The GST officials are looking into the possibility of tightening the GST rules to boost GST revenues, and improve compliances. Some of the measures being considered are as follows:

  • Imposing curbs on new taxpayers passing on ITC
  • Capping of value of merchandise for calculating export benefits etc.
  • [excerpts from Livemint]