Budget 2020: FinMin seeks views for rationalising I-T, duties

Finance Minister Nirmala Sitharaman, who had to announce additional measures to stimulate a slowing economy within a month of her maiden budget being approved by Parliament, is due to present the annual budget for the financial year 2020-21 on February 1.

While the ministry holds pre-budget consultations with representatives of different sectors and stakeholders, the Department of Revenue in the finance ministry, perhaps for the first time, put out a circular seeking suggestions for changes in income tax rates for both individuals and corporates as well as in indirect taxes such as excise and customs duty.

The November 11 circular asked industry and trade associations to give “suggestions for changes in the duty structure, rates and broadening of tax base on both direct and indirect taxes giving economic justification for the same.” “Your suggestions and views may be supplemented and justified by relevant statistical information about the production, prices, revenue implication of the changes suggested and any other information to support your proposal,” it said.

After her maiden budget on July 5, Sitharaman on September 20 announced a cut in corporate income taxes for domestic companies to 22 pc from 30 pc previously. This would bring effective corporate tax rate, including all additional levies, to about 25.2 pc, for companies which are not receiving any incentives or exemptions.

New manufacturing companies formed after October 1 will enjoy a 15 pc (effective rate of 17 per cent) corporate income tax rate, against 25 pc previously. The move is estimated to result in Rs 1.45 lakh crore in revenue loss for the Centre during 2019-20.

There have been demands for a reduction in income tax rates for individuals as well so as to put more money in the hands of the common man for a consumption-led revival of the economy. India’s economic growth had slipped to a six-year low of 5 pc in the April-June quarter.

A pilot demo of BHIM UPI QR-based payments began on Wednesday via a live transaction at a merchant terminal at the ongoing Singapore FinTech Festival 2019, the payment system’s first approach to the international market. The demo will continue, which started on November 11 and would end on Nov 15. This QR code-based system would allow anyone with a BHIM app to scan the SGQR at NETS terminals for payments in Singapore. “This is the first time that BHIM app has gone international,” said Indian High Commissioner to Singapore Jawed Ashraf, who launched the live demo. The project is being jointly developed by the National Payments Corporation of India and Network for Electronic Transfers of Singapore. It is targeted to go live by February 2020, said the High Commission. “This is another achievement for fintech cooperation between India and Singapore, after the launch of RuPay International card and SBI remittance app, last year by PM Narendra Modi,” said Ashraf.