Explains Budget 2024 And GST Outlook | NDTV Profit - video Dailymotion

NDTV Profit

#CBIC chairman Sanjay Agarwal explains what ISD being mandatory means for companies, CBIC's outlook on #GST collection and more.   Watch him in conversation with Janani Janarthanan.   For the latest news and updates, visit: ndtvprofit.com

Transcript

00:00 [MUSIC PLAYING]

00:03 Hello and welcome.

00:14 You're watching NDTV Profit.

00:16 And this is part of our series, Budget 2024, The Takeoff.

00:20 We're here post the interim budget,

00:22 talking to one of the important people with respect

00:24 to the revenue parts of the thing, the CBIC chairman, Mr.

00:28 Sanjay Kumar Agarwal.

00:29 Very many thanks for joining us today, sir.

00:32 It started on, one might say, a bit of a disappointment.

00:35 There were no big tax changes, direct or indirect tax changes.

00:39 But there have been a few notable additions

00:41 in the finance bill, which I want to come to first,

00:44 one being the ISD becoming mandatory.

00:48 Now, can you help break it down for our audience what that

00:50 exactly means and what it will entail?

00:53 This input service distributor, basically,

00:57 they can be big companies, which may have their presence

01:01 in several states.

01:02 The ones they have presence in several states,

01:05 they are treated as distinct persons in those states.

01:09 So when they obtain some input services,

01:12 and that may be built to their headquarters, head office.

01:16 But the services used by their branch offices

01:20 or their establishment in other states.

01:22 So there, earlier, there was no mandatory provision

01:26 for distribution of the input tax credit taken by them

01:29 to their branch offices.

01:31 So now, in the budget, as per the recommendation of GST

01:34 Council, amendment has been carried out in the GST law

01:39 to make it mandatory for them to distribute it

01:41 to their branch offices in the proportion

01:43 it is used in those offices.

01:45 OK, so this follows the GST Council approval

01:48 that has already been given in a previous meeting.

01:51 Coming to the penalty levy that has

01:52 been notified for the non-registration of packing

01:56 machines used in the tobacco industry,

01:59 why now is this also following a previously approved GST Council

02:03 thing, just to get the significance of it?

02:05 Yeah.

02:07 Group of ministers committee was set up

02:10 to look into the tobacco sector issues.

02:12 And one of the recommendations made by them

02:15 was registration of the packing machines on the common portal.

02:20 So accordingly, regulations have been

02:23 notified for registration of these packing packaging

02:26 machines.

02:27 Now, another section has been inserted in GST law.

02:32 That is section 122(a).

02:34 And in case they fail to register

02:36 the machine on common portal, now

02:38 the provision has been made for imposition of penalty

02:41 of rupees one lakh per machine.

02:43 And the machine can be seized and subsequently confiscated.

02:47 And is there a timeline by which this registration

02:49 has to be completed?

02:51 This registration has to be completed

02:53 as soon as the machine is installed in the factory.

02:55 As soon as it is installed.

02:57 OK.

02:58 So and another thing of--

03:00 I want to come to the figures now, the collections.

03:02 We've had a wonderful year for GST collections,

03:04 very steady growth that we're seeing.

03:06 And in her speech, the budget speech,

03:08 the finance minister also mentioned

03:09 about how it's a steady 1.66 lakh crore every month.

03:14 Coming on that, is there a figure perhaps

03:17 for FY25, the average collection that you're expecting,

03:20 considering that the revenue growth has been very good?

03:23 I would like to mention that in the current financial year,

03:27 the GST collections are very robust.

03:30 There is a very healthy growth.

03:31 And in three months, the GST collection,

03:34 gross GST collection figure has crossed the mark

03:36 of rupees 1.7 lakh.

03:38 And in the month of January, it was 1.74 lakh crores.

03:43 That is the second highest GST collection ever.

03:47 So that gives us confidence that this year we'll

03:50 end up with robust GST growth.

03:52 And accordingly, the targets have been fixed

03:54 for next financial year.

03:56 And in this current financial year,

04:00 the average monthly collection of GST is 1.67 lakh.

04:04 So we are expecting it to be something

04:07 like 1.7 lakh crores.

04:09 By the end of this fiscal?

04:12 So that may become a norm in the next fiscal.

04:16 OK, a 1.7 number.

04:18 Wonderful, sir.

04:20 Another one I want to ask about is

04:22 the RE of the custom duties and the union excise.

04:25 We understand that there is one already custom duty cut, which

04:28 is being also reflected in this.

04:30 And also global trade slowdown has impacted, in fact,

04:33 custom duties.

04:34 When we understand the RE, now if you

04:36 look at the FY25 considerations, what is your outlook?

04:40 What are the factors that you have considered?

04:42 Are there any changes other than these factors

04:44 when it comes to that figure that you've said?

04:47 While fixing the BE for FY25, we have

04:52 gone by the collection figures of GST duty

04:55 in the current financial year, taking into account

04:57 that the customs duty collection budget estimate is 2.5%

05:05 over revised estimate of customs duty

05:08 in the current financial year.

05:10 As far as central excise duty is concerned,

05:13 the next year budget estimate is 5% higher

05:16 than the revised estimate for central excise duty collection

05:21 for the current financial year.

05:23 OK, and no new factors considered other than the one?

05:26 While fixing the target for central excise duty

05:29 for next financial year, we have taken into consideration

05:33 the growth in consumption of fuels, petroleum fuels.

05:39 So that has been taken into consideration.

05:41 Accordingly, the target has been fixed

05:43 for the next financial year.

05:45 If I may go a little out of syllabus

05:47 and go into perhaps some of the GST,

05:49 pressing GST concerns that seems to be there.

05:52 One, of course, was the spate of notices that were observed.

05:56 Many of the companies also reported on their exchange

05:59 filings that they have received a tax demand notice.

06:02 Now following this, there was a lot--

06:04 there was addressing saying the government is cognizant of it.

06:07 And you'd also spoken to us about how

06:09 this is happening because of a particular timeline also.

06:11 That was one of the factors to be considered.

06:14 But we saw a circular come out very recently

06:16 of the department informing the field formations

06:19 to excise a little caution.

06:20 One, where is that coming from?

06:22 And now what happens to a lot of these cases, many of them

06:26 they're choosing to litigate.

06:28 What do they look forward to now?

06:29 Yeah, in fact, what happened that there

06:31 were bunching of time limit for issuance of FUQOR notice

06:35 for the financial year '17, '18, '18, '19, and '19, '20.

06:39 And because of the time limit coming to a close,

06:42 notice were to be issued within the time limit for '17, '18.

06:46 And the adjudication was also to be completed.

06:49 That's why you might have noticed a spate of notices

06:52 issued to the taxpayers.

06:54 Maybe many of the notices have been

06:56 issued because mismatches were found in their written filing.

07:00 And other than that also, there may

07:02 be because of a scrutiny or in audit,

07:06 certain infractions have been found.

07:08 And because of that, the notices have been issued.

07:10 But I can tell you that less than 1% taxpayers

07:13 are selected for written scrutiny or for audit.

07:16 So the numbers cannot be very large.

07:20 But on certain sectors, wherever certain contraventions have

07:27 been noticed, and it has been found

07:28 that taxpayers have not paid the tax in accordance

07:31 with the provisions of law, so notices have been issued.

07:34 Some of the sectors have taken it up with us.

07:39 And matters are also under examination.

07:43 Is there maybe a figure that we can get on perhaps

07:45 the total notices or perhaps the number?

07:48 That will be difficult to give because notices

07:51 have been issued by central tax administration

07:53 as well as by state tax administration.

07:55 So it is difficult to give you the figure.

07:58 I understand, sir.

08:00 Another component of online gaming

08:02 is, of course, the new GST rate that was put

08:05 in effect from the 1st of October.

08:07 This was clarified multiple times.

08:09 The industry had some confusion.

08:10 But it was clarified.

08:12 Now, how do we see?

08:13 Are companies compliant with it?

08:15 What has been the reporting trends you've noticed

08:17 from 1st August for this new provision that has been laid,

08:21 GST on online gaming?

08:23 I'm happy to tell you that after these new provisions have come

08:27 into effect from 1st of October, there

08:30 is a robust growth in revenue collection

08:33 from the online gaming companies.

08:35 In fact, it has gone up 400 times.

08:39 OK.

08:40 400%.

08:41 So rather four times the revenue collections have gone up.

08:44 So that means the online gaming companies are doing very well.

08:47 And the GST revenue collection has also

08:51 gone up tremendously from this sector.

08:54 Any range, if not an exact number, any indicative range?

08:59 On an average, previous to these amendments,

09:03 we found that it was something like 370 crores.

09:08 Now it has gone up to 1,850 crores.

09:11 OK.

09:12 So there is a huge jump in revenue collection

09:14 from the online gaming companies.

09:19 Interesting.

09:20 On the last one, and I want to ask this,

09:22 considering GST 2.0, now it has been six years.

09:27 There have been many changes.

09:29 It's an evolving taxation system every year.

09:33 If there is a GST 2.0, as we call it,

09:35 what do you envision in it?

09:37 What is the way forward for GST?

09:39 I can see that when GST was introduced,

09:42 since it was a new tax and it was difficult for everyone

09:48 to understand, and maybe the IT system was also not

09:52 fully ready.

09:53 So the work was in progress, but over a period of time,

09:58 the IT system is very much in place.

10:00 And many policy changes have also taken place.

10:03 And accordingly, written filing process

10:05 has been made sequential.

10:07 That has led to better compliances by taxpayers.

10:11 Apart from that, wherever there was any kind of litigation

10:14 or any clarification was required,

10:17 so their GST council has taken a very proactive stand.

10:21 And in those issues, clarifications

10:23 have been issued to bring uniformity, transparency,

10:27 and to reduce the litigation.

10:30 These clarifications have come very handy.

10:33 And I can also mention that wherever there was a demand,

10:36 like to encourage MSME sector, earlier on e-commerce platform

10:41 they were not allowed unless they take the restriction.

10:44 But now that threshold has been removed

10:48 in case of interest rate sale of goods.

10:51 So these are the steps which have been taken

10:54 to promote the small businesses.

10:56 Apart from that, there has been now a special composition

11:01 scheme for small service providers.

11:03 So all these are very progressive steps

11:06 which have been taken over a period of time, which

11:08 have led to ease of doing business in the country

11:11 and promoting the MSME sector.

11:15 Apart from that, to increase the compliances,

11:20 department is nudging the taxpayers wherever

11:22 mismatches are being found.

11:24 They are being informed by online portal

11:29 so that they can, on their own, they can do the self-check.

11:33 And in case they find that there is anything which

11:36 remains deficient on their part, they can rectify,

11:38 even before the department can point out to them.

11:42 So facilitation, inclusive and including

11:45 MSMEs and other people, and of course, better compliance.

11:48 Can we say this is the thing--

11:50 And apart from that, the threshold

11:52 for issuing e-invoices have gradually been lowered.

11:58 And now it is those who are having

12:00 the turnover of five crores, they

12:02 have to issue the e-invoices.

12:03 And these e-invoices get auto-populated

12:06 in the outward return and in their GST return.

12:11 So that is the way it is being done.

12:13 Technology is being used.

12:15 In fact, the input tax credit, which

12:18 would be available to them, that is getting auto-populated

12:21 from the returns which are being filed by their suppliers.

12:25 So these are the technological advancement

12:27 which have also been taken for making the life easier

12:32 for the taxpayers.

12:34 And on that note, my last question to you

12:36 is really a message for our viewers.

12:39 Yesterday, you had spoken about how the return filing is,

12:41 in fact, increasing.

12:42 And the department is leveraging technology and AI

12:46 to help enhance the experience for the honest taxpayer,

12:49 put them on a level playing field.

12:51 Any message for our viewers to end on that note?

12:54 I would like to convey to the taxpayers

12:58 that wherever they are having any genuine difficulty,

13:02 department is with them.

13:04 And GST Council and the mechanism

13:07 is very conducive for resolving the issues.

13:12 The other thing is that department

13:14 is trying to obtain as much information as possible

13:18 from them in their return filing.

13:20 So that subsequently, no issues have to be faced by them.

13:23 And one thing I would like to inform or convey

13:27 through your channel, that lot of department

13:30 is now having a lot of data and a lot of 360-degree profiling

13:34 of the taxpayer is being done.

13:36 So with that deep data analytics,

13:38 it is very difficult to escape in case somebody

13:42 is trying to hide something.

13:44 So sooner or later, we'll come to the notice

13:46 of the department.

13:47 So it is better to comply rather than to suffer subsequently.

13:52 Comply always.

13:54 On that note, I think, thank you so very much for talking to us.

13:57 Always a pleasure talking to you.

13:59 I hope it's also been just as fruitful for our viewers.

14:02 And on that note, you've been watching NDTV Profit.

14:06 Stay tuned with us on our next exclusive.

14:09 [MUSIC PLAYING]

14:12 [MUSIC PLAYING]

14:16 [MUSIC PLAYING]

14:19 [BLANK_AUDIO]

Explains Budget 2024 And GST Outlook | NDTV Profit

Category

Transcript

Recommended