GST collection stays robust

Central and state governments collected Rs1.74 lakh crore in Goods and Services Tax (GST) revenue in August, showing an annual growth of 10%, nearly in line with the estimated economic growth rate for this fiscal. The finance ministry’s estimate for nominal economic growth in the current financial year is 10.5%. Experts said GST revenue collection reflects both robust consumption of goods and services and administrative measures taken by the tax authorities to improve compliance. GST revenue collections are expected to further improve in the festive season, they said. The central government collected Rs30,862 crores while states collected states Rs38,411 crores, before adjusting for refunds. The collection of integrated GST (IGST) on imports and inter-state sales was at Rs93,621 crores. Revenue from GST cess on automobiles, tobacco and aerated drinks stood atRs12,068 crore in August. Net GST receipts after adjusting for refunds stood at Rs1.5 lakh crorein August, up from Rs1.41 lakh crore in the same month a year ago. So far this financial year, Centre and states collected Rs9.14 lakh crorein GST receipts, 10.1% more than the revenue collected in the same time a year ago.IGST collections showed a 12.45% growth in August from the same month a year ago, indicating strong growth in imports.

CBDT rolls out Dispute Resolution Scheme (e-DRS), 2022

In pursuance of section 245MA in the Income-tax Act, 1961 (hereinafter referred to as "the Act"), the Central Board of Direct Taxes (CBDT) had notified the e-Dispute Resolution Scheme, 2022 (e-DRS) with the aim to reduce litigation and provide relief to eligible taxpayers. Section 245MA of the Act also provides for the constitution of Dispute Resolution Committees (DRC). The e-DRS enables the taxpayer, who fulfils certain specified conditions as stipulated in section 245MA of the Act, to file an application electronically for dispute resolution to the DRC designated for the region of Principal Chief Commissioner of Income-tax having jurisdiction over the taxpayer. To this end, DRCs have been constituted in all 18 jurisdictional Pr. CCIT regions across the country.

As per e-DRS, a taxpayer can opt for e-Dispute Resolution against the ‘specified order’ as defined in clause (b) of the Explanation to section 245MA of the Act, which includes an order in which the aggregate sum of variations proposed or made does not exceed Rs.10 lakh and returned income for the relevant assessment year does not exceed Rs. 50 lakh. Further, such order should not be based on search/surveys or information received under an agreement referred to under section 90 or 90A of the Act. The DRC is mandated to pass its order within six months from the end of month in which application for dispute resolution is admitted by it.

RBI enhances limit for tax payments through UPI from Rs 1 lakh to Rs 5 lakh, introduces facility of "Delegated Payments" in UPI

The Reserve Bank of India has stated in a latest update that the transaction limit for UPI is Rs 1 lakh except for certain category of payments which have higher transaction limits. It has now been decided to enhance the limit for tax payments through UPI from Rs 1 lakh to Rs 5 lakh per transaction. This will further ease tax payments by consumers through UPI. It is also proposed to introduce a facility of "Delegated Payments" in UPI. This would enable an individual (primary user) to allow another individual (secondary user) to make UPI transactions up to a limit from the primary user’s bank account without the need for the secondary user to have a separate bank account linked to UPI. This will further deepen the reach and usage of digital payments.

Outlook:

The Indian government’s gross direct tax collections for the fiscal year 2024-25 saw a surge of 24% year-on-year to Rs.8.13 lakh crore, according to data released by the Central Board of Direct Taxes (CBDT). Net direct tax collections also saw a 22.5% rise to Rs.6.92 lakh crore, up from Rs.5.65 lakh crore in the previous year. Additionally, tax refunds surged by 33.5%, totaling Rs.1.2 lakh crore as compared to Rs.90,028crore during the same period last year. However, with a moderation in economic growth momentum, there is a possibility that this wild surge in tax collection may also soften a bit.