Union Budget 2024 Highlights: Announcements by Finance Minister Nirmala Sitharaman

Summary of Direct and Indirect Tax Proposals: Budget 2024-25

 Summary of the direct and indirect tax proposals made in the Budget 2024-25 (Finance Bill 2024) presented by Smt Nirmala Sitharaman, Union Minister of Finance and Corporate Affairs:

Highlights of the Direct Tax Proposals of Finance Bill, 2024

No changes in Tax Rates

No changes have been proposed to the existing rates of direct and indirect taxes. The existing rates of income tax, gst, import duties, etc. have been retained.

To provide continuity, some tax benefits and exemptions have been extended by 1 year until 31st March 2025. These include:

  1. Tax benefits for startups;
  2. Tax exemptions on certain income for International Financial Services Centers (IFSCs); and
  3. Tax exemptions on investments made by sovereign wealth funds and pension funds.

The Interim Budget 2024 maintains the status quo on tax rates and extends certain tax breaks by a year to provide stability and continuity in taxation. No new changes or reforms have been introduced to the tax structure or rates.

Withdrawal of Outstanding direct tax demands

The FM has announced to withdraw the outstanding demands of income tax. Here is a summary of the key points regarding the withdrawal of outstanding direct tax demands announced in the Interim Budget 2024:

i) In line with the government’s vision to improve ease of living and doing business, outstanding petty direct tax demands up to Rs 25,000 dating back to 1962 will be withdrawn for the period up to FY 2009.

ii) Similarly, outstanding demands up to Rs 10,000 will be withdrawn for the FY 2010-11 to 2014-15.

iii) These are non-verified, non-reconciled or disputed demands that continue to remain on the books, causing anxiety for taxpayers.

  1. Withdrawing these demands will help provide relief to honest taxpayers and enable refunds for subsequent years.
  2. This is expected to benefit about 1 crore taxpayers who have such outstanding demands.
  3. The move aims to improve tax payer services and reduce harassment of taxpayers over small disputed sums dating back decades.

In short, the Interim Budget 2024 has announced the withdrawal of old, petty direct tax demands up to Rs 25,000 till FY 2009-10 and Rs 10,000 between FY 2010-11 to 2014-15 to provide relief to taxpayers.

Highlights of the Indirect Tax Proposals of Finance Bill 2024

The FM has proposed in Budget 2024 to retain the same tax rates in respect of GST, import duty, etc. indirect taxes as are applicable at present, i.e. existing GST and import duty rates shall continue in FY 2024-25 as well.

BUDGET HIGHLIGHTS 2024-25, Ministry of Finance

GST collection in October crosses ₹1.3 lakh crore, second highest ever

GST collection in October crosses ₹1.3 lakh crore, second highest ever

The gross GST revenue collected in the month of October 2021 exceeded 1.3 lakh crore. The GST revenues for October is the second highest ever since introduction of GST, second only to that in April 2021, which related to year-end revenues. The revenues for the month of October 2021 are 24% higher than the GST revenues in the same month last year.

The gross GST revenue collected in the month of October 2021 exceeded ₹1.3 lakh crore. The GST revenues for October is the second highest ever since introduction of GST, second only to that in April 2021, which related to year-end revenues. The revenues for the month of October 2021 are 24% higher than the GST revenues in the same month last year.

“This is very much in line with the trend in economic recovery. This is also evident from the trend in the e-way bills generated every month since the second wave. The revenues would have still been higher if the sales of cars and other products had not been affected on account of disruption in supply of semi-conductors,” the government said in a statement.

The government settled ₹27,310 crore to CGST and ₹22,394 crore to SGST from IGST as regular settlement. The total revenue of Centre and the States after regular settlements in the month of October 2021 is ₹51,171 crore for CGST and ₹52,815 crore for the SGST.

During the month, revenues from import of goods was 39% higher and the revenues from domestic transaction (including import of services) are 19% higher than the revenues from these sources during the same month last year.

Indian stock market benchmark Sensex was up over 600 points in noon trade. A private survey released earlier in the day showed India’s manufacturing sector activities gained further strength in October as companies scaled up production and stepped up input purchasing in anticipation of further improvements in demand.

The seasonally adjusted IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) rose from 53.7 in September to 55.9 in October, pointing to the strongest improvement in overall operating conditions since February.

Robust gains in new work aided production growth in October as output and new orders expanded at fastest rates in seven months, while business optimism hit a six-month high, the survey said.

Source: Mint

Ubharte Sitaare Fund: Rs 250-crore export-oriented fund for MSMEs launched

The initiative would play a catalytic role in contributing to the growth of the identified companies and would also have downstream benefits such as growth and diversification of India’s exports, impetus to brand India, and employment generation.

Union finance minister Nirmala Sitharaman on Saturday launched the Ubharte Sitaare Fund (USF) for export-oriented small and mid-sized companies and startups in Lucknow. Sitharaman had announced the fund in her Budget speech in 2020 in the backdrop of constraints faced by small and mid-sized companies in realising their export ambitions, stating that micro, small and medium enterprises (MSMEs) were important to keep the “wheels of the economy moving”.

The fund, jointly sponsored by Exim Bank and SIDBI, has a size of Rs 250 crore with a green shoe option of Rs 250 crore. The fund will invest by way of equity, and equity-like products, in export-oriented units, both in the manufacturing and services sectors.

Stating that the ambitious programme was to support the champion sectors, she said some developed countries like Germany have already tried this by identifying, supporting and hand-holding the champion sectors and giving them necessary technology and fund infusion. Ubharte Sitaare largely follows the same principal, she said, adding that induction of tech will itself bring a big difference to the small and medium units.

“A project that was tailormade for MSMEs to identify champions among them and also support them now also gets the additional benefit of UP’s one-district-one-product (OPOD) programme. UP has already completed the identification process of every product in every district, and also the champions in the state. So UP justifies the launch of Ubharte Sitaare programme,” she said, adding that this will help Sidbi to extend the credit and technology facility and boost capacity to go to the market to raise funds.

The FM highlighted the efforts taken by the government to provide a boost to the MSME sector in the country, including the launch of the production-linked incentive scheme and noted that the USF would make investments in export-oriented small and mid-sized companies by way of equity and equity-like products, and thereby help script a new paradigm of growth in exports. The initiative would play a catalytic role in contributing to the growth of the identified companies and would also have downstream benefits such as growth and diversification of India’s exports, impetus to brand India, and employment generation.

Harsha Bangari, deputy managing director, India Exim Bank, said India Exim Bank has developed a robust pipeline of over 100 potential proposals and supported several companies across a diverse range of sectors. SIDBI chairman & managing director Sivasubramanian Ramann highlighted several initiatives that have been taken in the recent past for the benefit of MSMEs in the country, more so in the state of Uttar Pradesh. Meanwhile, in another event, Punjab National Bank MD & CEO SS Mallikarjuna Rao handed over a loan sanction letter of Rs 5,100 crore for implementation of the Ganga Expressway project to the Uttar Pradesh Expressways Industrial Development Authority (UPEIDA).

The 594 km-long, eight-lane expressway project from Meerut to Prayagraj will cost nearly Rs 36,000 crore and will pass through 12 districts in UP. The amount of Rs 5,100 crore, under the securitisation process will be repaid to the bank within a period of 15 years from the toll to be received on the Agra-Lucknow Expressway. During this period of loan repayment, the expressway would continue to be owned and operated by UPEIDA.

Source: Financial Express

India’s Forex reserves rise to lifetime high of $621.5 billion

In the reporting week, the increase in the forex kitty was due to a rise in foreign currency assets (FCAs), a major component of the overall reserves, as per weekly data by the Reserve Bank of India (RBI).
The country’s foreign exchange reserves increased by $889 million to a lifetime high of $621.464 billion in the week ended August 6, 2021, RBI data showed on Friday.
 
In the previous week ended July 30, 2021, the reserves had surged by $9.427 billion to reach $620.576 billion.

In the reporting week, the increase in the forex kitty was due to a rise in foreign currency assets (FCAs), a major component of the overall reserves, as per weekly data by the Reserve Bank of India (RBI).

FCAs rose by $1.508 billion to $577.732 billion in the reporting week.

Gold reserves were down by $588 million to $37.057 billion in the reporting week, the data showed.

The special drawing rights (SDRs) with the International Monetary Fund (IMF) dipped by $1 million to $1.551 billion.

The country’s reserve position with the IMF also fell by $31 million to $5.125 billion, as per the data.

Source: Economic Times

 

GSTN issues advisory for taxpayers regarding Blocking of E-Way bills.

GST Council, has recommended to reduce / waive the interest/ late fee for delayed filing of GSTR 3B by small taxpayers (having turnover upto Rs. 5 crores) for the tax period from July 2017 to July 2020
Taxpayers who have not filed GST returns for two months or quarters up to June 2021 will not be able to generate e-way bills from August 15.

The Goods and Service Tax network on 4th August 2021 has decided to resume the blocking of e-way bill generation facility on the EWB portal, for all the taxpayers in terms of Rule 138 E (a) and (b) of the CGST Rules, 2017, from 15th August onwards.

Advisory for Taxpayers regarding Blocking of E-Way Bill (EWB) generation facility resume after 15th August, 2021.

1. As you might be aware that the facility of blocking E way bill generation had been temporarily suspended due to pandemic, in terms of Rule 138 E (a) and (b) of the CGST Rules, 2017, the E Way Bill generation facility of a person is liable to be restricted, in case the person fails to file their return in Form GSTR-3B / statement in CMP-08, for a consecutive period of two months / Quarters or more.

2. The government has now decided to resume the blocking of EWB generation facility on the EWB portal, for all the taxpayers in terms of Rule 138 E (a) and (b) of the CGST Rules, 2017, from 15th August onwards.

3. Thus, after 15th August 2021, the System will check the status of returns filed in Form GSTR-3B or the statements filed in Form GST CMP-08, and restrict the generation of EWB in case of: Non filing of two or more returns in Form GSTR-3B for the months up to June, 2021 and Non filing of 02 or more statements in Form GST CMP-08 for the quarters up to April to June, 2021

4. To avail continuous EWB generation facility on EWB Portal, you are therefore advised to file your pending GSTR 3B returns/ CMP-08 Statement immediately.

5. For details of blocking and unblocking EWB click on below links :

https://tutorial.gst.gov.in/userguide/returns/index.htm#t=FAQs_unblockingewaybill.htm

Note: Please ignore this update if you are not registered on the EWB portal. Regards,
Team GSTN

MCA gives compliance relief to businesses due to second wave of COVID-19

The Ministry of Corporate Affairs (MCA), considering requests to waive additional fee for late filing of statutory forms which fall due between 1 April and end of May owing to the COVID-19 restrictions and disruption, has granted extra time without additional fee for filing statutory forms till the end of July, 2021

 

The ministry of corporate affairs (MCA) has offered relaxation in certain compliance requirements for businesses, including a longer interval between two board meetings in view of the hardships during the second wave of the pandemic.

Companies are normally required to hold a minimum of four board meetings in a year with the interval between them not exceeding 120 days. This has now been relaxed by 60 days so that the interval could go up to 180 days, the ministry said in a notification issued on Monday.

The ministry also said in a separate notification that it has received several requests to waive the additional fee for late filing of statutory forms which fall due between 1 April and end of May in view of the covid-19 restrictions and disruption.

The ministry said these requests have been examined and taking into account the difficulties due to resurgence of coronavirus infections, extra time without additional fee has been granted till the end of July for filing statutory forms. In the case of filing forms to report creation or modification of a charge (lien or claim) on the assets of a company under various circumstances, the ministry has issued another notification granting relief. Accordingly, in cases where due date had expired before 1 April, extra time has been granted till end of May.

The finance ministry has already given relief for various compliance requirements related to income tax and goods and services tax (GST), besides exempting basic customs duty and agriculture cess on various medical supplies used in the prevention and treatment of coronavirus disease. The pandemic has taken a heavy toll on lives with over 222,000 deaths.

The central government has not favoured a lockdown of the country during the second wave, but several states had to impose curbs on movement and assembly of people to break the chain of infections. India has so far vaccinated over 15 crore people, or roughly 12% of the population. The second wave is expected to slow India’s economic recovery from an expected 7.7% contraction in FY21.

Source: Ministry of Corporate Affairs

GST Collections surge to record Rs. 1.41 lakh crore in April

The GST revenues during April 2021 are the highest since the introduction of GST even surpassing collections in the last month

The gross GST revenue collected in the month of April is at a record high of Rs. 1,41,384 crore of which CGST is Rs. 27,837 crore, SGST is Rs. 35,621, IGST is 68,481 crore (including Rs. 29,599 crore collected on import of goods) and Cess is Rs. 9,445 crore (including Rs. 981 crore collected on import of goods).

“Despite the second wave of COVID-19 pandemic affecting several parts of the country, Indian businesses have once again shown remarkable resilience by not only complying with the return filing requirements but also paying their GST dues in a timely manner during the month,” according to a statement by Ministry of Finance.

The GST revenues during April 2021 are the highest since the introduction of GST even surpassing collections in the last month (March’2021). In line with the trend of recovery in the GST revenues over past six months, the revenues for the month of April 2021 are 14% higher than the GST revenues in the last month of March’2021.

During the month, the revenues from domestic transaction (including import of services) are 21% higher than the revenues from these sources during the last month.

GST revenues have not only crossed the Rs. 1 lakh crore mark during successively for the last seven months but have also shown a steady increase. These are clear indicators of sustained economic recovery during this period.

Closer monitoring against fake-billing, deep data analytics using data from multiple sources including GST, Income-tax and Customs IT systems and effective tax administration have also contributed to the steady increase in tax revenue. Quarterly return and monthly payment scheme has been successfully implemented bringing relief to the small taxpayers as they now file only one return every three months.

Providing IT support to taxpayers in the form of pre-filled GSTR 2A and 3B returns and ramped up System capacity have also eased the return filing process.

During this month the government has settled Rs. 29,185 crore to CGST and Rs. 22,756 crore to SGST from IGST as regular settlement.

The total revenue of Centre and the States after regular and ad-hoc settlements in the month of April’ 2021 is Rs. 57,022 crore for CGST and Rs. 58,377 crore for the SGST.