GST receipts decline to three-month low but hold on to Rs 1.65 trn in Dec

Goods and services tax (GST) collection in December declined to a three-month low due to economic activities winding down after Diwali but remained elevated at Rs 1.65 trillion. The growth rate year-on-year fell to a three-month low of 10.3 per cent over Rs 1.49 trillion in December 2022-23. GST collection in a particular month is on account of production, sales, and purchases in the previous month.Thus, collection in December pertained to transactions in November, which was marked by holidays after Diwali, slowing receipts. The same trend was visible in other data points such as the core sector, which witnessed a six-month low growth rate of 7.8 per cent in November. GST collection has been Rs 1.65 trillion and above for six months of the nine this financial year. It did not fall below Rs 1.57 trillion in any month.Average monthly gross GST collection -- Rs 1.66 trillion in the first nine months -- represents a 12 per cent rise over the Rs 1.49 trillion recorded in the corresponding period of FY23. “While GST collection is slightly lower than what was seen last month, the consistent mark above Rs 1.6 trillion provides large fiscal confidence,” said Abhishek Jain, partner and national head (indirect tax), KPMG. Central GST (CGST) after the integrated GST settlement stood at Rs 70,501 crore in December, the third highest in the nine months, after April and October. With this, CGST yielded Rs 6.26 trillion during April-December -- 77 per cent of the Rs 8.12 trillion estimated in the Budget Estimates (BE) for 2023-24.

With three more months remaining this financial year, CGST collection is likely to exceed the Budget Estimate. After 42 per cent devolution to the states, CGST receipts, together with robust direct tax collection, would provide enough tax revenues to the government to bring its fiscal deficit to the budgeted 5.9 per cent of gross domestic product. This is likely to happen despite dwindling disinvestment receipts and expected higher revenue expenditure due to various subsidies. The earlier data showed direct tax collection after refunds grew 20.66 per cent to Rs 13.7 trillion till December 17 this financial year, accounting for a bit over three-fourths of the BE at Rs 18.23 trillion for 2023-24. In December, revenues from domestic transactions (including imports of services) were 13 per cent higher than those from these sources during the same month last year. This means GST on import of goods (integrated GST and cess) slowed collection. GST on import of goods rose just 3.65 per cent at Rs 42,613 crore in December year-on-year. Barring Sikkim and Meghalaya, every state saw growth in GST collection in December. Meghalaya saw flat GST receipts at Rs 171 crore. States and Union Territories such as Ladakh, Arunachal Pradesh, Andaman and Nicobar, and Lakshadweep saw growth in the range 35-310 per cent. Saurabh Agarwal, tax partner at EY, attributed this to increased economic activities in these areas. However, Rajasthan and Chhattisgarh each recorded a mere 1 per cent growth rate in December, while Jharkhand saw a 4 per cent rise. “While major states have continued their growth, deeper analysis is required for its lack in Rajasthan, Chhattisgarh, and Jharkhand,” said M S Mani, partner, Deloitte India.

- Business Standard 2th January, 2024

New income tax slab and rates for new tax regime FY 2023-24 (AY 2024-25) announced in Budget 2023

Basic exemption limit has been hiked to Rs.3 lakh from Rs 2.5 currently under the new income tax regime in Budget 2023. Further, the income tax slabs in the new tax regime has been changed. According to the announcement, 5 income tax slabs will be there in FY 2023-24, from 6 income tax slabs currently. A rebate under Section 87A has been enhanced under the new tax regime; from the current income level of Rs.5 lakh to Rs.7 lakh. Thus, individuals opting for the new income tax regime and having an income up to Rs.7 lakh will not pay any taxes The income tax slabs under the new income tax regime will now be as follows: Rs 0 to Rs 3 lakh - 0% tax rate Rs 3 lakh to 6 lakh - 5% Rs 6 lakh to 9 lakh - 10% Rs 9 lakh to Rs 12 lakh - 15% Rs 12 lakh to Rs 15 lakh - 20% Above Rs 15 lakh - 30% The revised Income tax slabs under new tax regime for FY 2023-24 (AY 2024-25) Income tax slabs under new tax regime Income tax rates under new tax regime O to Rs 3 lakh 0 Rs 3 lakh to Rs 6 lakh 5% Rs 6

Jaitley plans to cut MSME tax rate to 25%

Income tax for companies with annual turnover up to ?50 crore has been reduced to 25% from 30% in order to make Micro, Small and Medium Enterprises (MSME) companies more viable and also to encourage firms to migrate to a company format. This move will benefit 96% or 6.67 lakh of the 6.94 lakh companies filing returns of lower taxation and make MSME sector more competitive as compared with large companies. However, bigger firms have shown their disappointment since the proposal for reducing tax rates was to make Indian firms competitive globally and it is the large firms that are competing globally. The Finance Minister foregone revenue estimate of Rs 7,200 crore per annum for this for this measure. Besides, the Finance Minister refrained from removing or reducing Minimum Alternate Tax (MAT), a popular demand from India Inc., but provided a higher period of 15 years for carry forward of future credit claims, instead of the existing 10-year period. “It is not practical to rem

Don't forget to verify your income tax return in August: Here's the process

An ITR return needs to be verified within 120 days of filing of tax return. Now that you have filed your income tax return, remember to verify it because your return filing process is not complete unless you do so. The CBDT has reduced the time limit of ITR verification to 30 days (from 120 days) from the date of return submission. The new rule is applicable for the returns filed online on or after 1st August 2022. E-verification is the most convenient and instant method for verifying your ITR. However, if you prefer not to e-verify, you have the option to verify it by sending a physical copy of the ITR-V. Taxpayers who filed returns by July 31, 2023 but forget to verify their tax returns, will get the following email from the tax department, as per ClearTax. If your ITR is not verified within 30 days of e-filing, it will be considered invalid, and may be liable to pay a Late Fee. Aadhaar OTP | EVC through bank account | EVC through Demat account | Sending duly signed ITR-V through s

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