Page 12 - Banking Finance June 2017

ROUNDUP

Don't raise tax exemp- India to grow 7.2% in FY18: World Bank
tion level: NITI Aayog to The World Bank in a report to South Asian Economy mentioned that "significant
risks" to economic growth could emanate from fallout
govt of demonetization on small and informal economy,

NITI Aayog has proposed a series of stress in the financial sector and uncertainty in global
measures to environment.
fuel eco- "However, demonetization could accelerate financial
nomic deepening, foster financial inclusion, and increase
growth to transparency, thereby having a positive development impact in the longer term,"
8% and to it said. There should be a large and durable shift from cash to electronic pay-
make sure the growth is inclusive, in ment methods, for this economic target to be achieved
a three-year action plan circulated
among chief ministers. GST reform an act of courage, says IMF chief
IMF chief Christine Lagarde said she expects "some positive outcome" as a re-
To widen the personal income tax
sult of GST implementation.
base, NITI Aayog said the nominal ex-
emption threshold of Rs. 2.5 lakhs for "The GST reform is really an act of courage," Lagarde told
individuals should remain unchanged reporters during the Annual Spring Meeting of the Inter-
such that the real value of the thresh- national Monetary Fund and the World Bank. It really
old is reduced, leading to the inclu- means reforming in-depth in each of the Indian States in
sion of a greater proportion of indi- order to substitute the State taxes with overall federal
viduals in the tax net over time. tax, the re-allocation of it and the digital platform that
"However, tax slabs corresponding to supports it, she said.
the lowest tax rate should be ex- CBDT to waive interest if tax demand paid in old cases
panded to ensure that the tax liabil-
ity of lower income individuals does The Central Board of Direct Taxes (CBDT) issued a circular for waiver of interest
in disputed tax demand in various scenarios. Tax officials can
not increase suddenly with the
now waive or reduce interest in cases where the taxpayer
growth in their nominal incomes",
said the think tank. did not deduct tax based on a high court ruling that was sub-
sequently overturned by the Supreme Court or via a retro-
PM launches Bhim- spective amendment.

Aadhaar payment app "However, no reduction or waiver of such interest shall be
ordered unless the principal demand… stands fully paid or
Bhim-Aadhaar Pay App, a thumb im-
pression pay- satisfactory arrangements for payment of the principal demand have been
made," CBDT guidelines to chief commissioner of income tax and director gen-
ment system
eral of income tax said.
was launched
by the Prime The guidelines also state that interest can be waived in cases where tax deduc-
Minister Mr. Modi. "Bhim-Aadhaar is tion at source could not happen because of seizure of books of accounts and
going to be a case study for reputed other documents by the income tax department. The same can also be done in
universities across the globe in the cases where the default is related to "non-deduction or a lower deduction of tax
days to come, and will be seen as the in respect of a payment made to a non-resident (including a foreign company)
foundation for an economic revolution being a resident of a country or specified territory outside India with whom In-
in the world. I urge (telecom minister) dia has entered into an agreement."
Ravi Shankar Prasad to get this initia- GST will make domestic cos competitive
tive patented, as the entire world is
"Unlike in other countries, the transition to the new tax regime would be smooth
looking forward to replicate this model
here because there are multiple points of taxation in the country. Hence, the possi-
in their respective countries," the PM
bility of sudden spurt in inflation is remote," said Revenue Secretary Hasmukh Adhia.
said at a function in Nagpur. Mr. Adhia is spearheading the implementation of the Goods and Services Tax.

12 | 2017 | JUNE | BANKING FINANCE

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