Lok Sabha Question No. 4628 (UNSTARRED), answered on 2020-03-23
Subject: Tax Rules
Ministry: FINANCE
Asked by: Ranjanben Dhananjay Bhatt

## Government of India Ministry of Finance Department of Revenue

## LOK SABHA UNSTARRED QUESTION NO. 4628

TO BE ANSWERED ON MONDAY, MARCH 23, 2020 CHAITRA 3, 1942 (SAKA)

## TAX RULES

†4628. SHRIMATI RANJANBEN DHANANJAY BHATT:

Will the Minister of FINANCE be pleased to state:

- (a) whether the Government proposes to ease tax rules;
- (b) if so, whether the Government has taken any steps in this regard; and
- (c) if so, the details thereof and if not, the reasons therefor?

## ANSWER MINSTER OF STATE IN THE MINISTRY OF FINANCE (SHRI ANURAG SINGH THAKUR)

(a) to (c):  Yes Sir, Government proposes to ease rules related to Indirect & Direct Taxes and has taken various steps in this regard as per Annexure.

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## Indirect Taxes

## GST

Based on the recommendations of the GST Council, various changes have been carried out in the GST Acts and rules made thereunder from time to time with a view to facilitate trade and industry.

- a) An  alternative  composition  scheme  has  been  introduced  for  supplier  of  services  or mixed  suppliers  (not  eligible  for  the  earlier  composition  scheme)  having  an  annual turnover in preceding financial year up to Rs. 50 lakhs.
- b) Taxpayers  opting  for  composition  scheme  are  now  required  to  file  only  one  return annually as against four quarterly returns earlier.
- c) Threshold limit for registration under GST has been increased from Rs. 20 lakhs to Rs. 40 lakhs for those suppliers who are engaged in exclusive supply of goods.
- d) Based on the suggestion received from stakeholders, the format for annual return and reconciliation  statement  has  been  simplified.  Further,  the  filing  of  these  returns  has been  made  optional  for  those  taxpayers  for  F.Y.  2017-18  with  aggregate  annual turnover up to Rs. 2 crores.
- e) Late fee due to late filing of FORM GSTR-1 and FORM GSTR-3B has been waived from time to time in order to ease compliance for taxpayers.
- f) Instructions  have  been  issued  by  the  Government  for  constitution  of  Grievance Redressal Committees (GRC) at Zonal/State level to tackle grievances of taxpayers on GST  related  issues.  It  shall  comprise  of  Central  tax  officers,  State  tax  officers, representatives of trade and industry and other stakeholders.
- g) Fully automated refund module with a scheme of single authority for disbursement of the  refund  amount  sanctioned  by  either  the  Centre  or  the  State  tax  authorities  has been implemented.

## Customs Act 1962

Various amendments have been made in the Customs Act in the previous Budgets to:

- a) Align with the Trade Facilitation Agreement to which India is a signatory.
- b) Create an Appellate authority for Advance ruling.
- c) Deferred  payment  of  duty  rules  to  provide  temporary  cash  adjustment  relief  to importers.
- d) Prescribe a specific time line for adjudication of Show cause Notices.
- e) Provide for clearance of goods by Customs Automated System.
- f) Provide for electronic cash ledger so as to enable easy payment of duties, taxes and fee.
- g) Provide for Customs Audit on post clearance basis.

## Direct Taxes

The process of easing of tax rules is a continuous process. Some of the recent measures taken for simplification of Income Tax Act, 1961 are as under:

- (A) The Income-tax Act, 1961 (the Act) provides for several exemptions and deductions from the total income which is chargeable to income-tax. In this regard, in order to simplify  the  tax  regime  and  lower  the  rates  of  taxes,  it  is  the  stated  policy  of  the Government to remove deductions and exemptions while simultaneously rationalizing the tax rates. It may be noted that the erstwhile Finance Minister while presenting the Union  budget  for  financial  year  (FY)  2015-16  stated  that  the  deductions  and incentives given to corporate taxpayers under the Act will be phased out over four years  while  simultaneously  reducing  the  tax  rates  Further,  the  Finance  Act,  2016, inter-alia ,  provided a sunset date for the existing profit linked deductions under the various provisions of the Act. Hence, the stated policy of the Government is to phase out exemptions and deductions while simultaneously reducing tax rates.
- (ii)      In relation to the above, the Taxation Laws (Amendment) Act, 2019 (TLAA) , inter-alia, amended  the  Act  by  inserting  new  section  115BAA  to  the  Act  which  provides  an option to the existing domestic companies to pay tax at rate of 22% subject to certain conditions including that they do not avail of any specified incentives or deductions. Further, the TLAA also inserted section 115BAB to the Act which provides an option to new manufacturing domestic companies, set up on or after 01.10.2019 engaged in the manufacture or production of article or thing or research or distribution in relation thereto and which commence manufacturing or production by 31.03.2023, to pay tax at a reduced rate of 15 % subject to certain conditions including that they do not avail of any specified incentives or deductions. The companies opting for the concessional tax regime will also not be required to pay Minimum Alternate Tax (MAT).
- (B) In addition to the above provisions, Finance Bill, 2020 (the Bill), inter-alia, proposes several measures for simplification of the provisions of the Act as under:
- (i)          In  order  to  simplify  the  taxation  regime  for  individuals  and  Hindu  Undivided  Family (HUF), the  Bill  proposes  to  amend  the  Act  to  provide  an  option  to  individuals  and HUF to opt for  a  simplified  tax  structure  under  which  such  person  can  pay  tax  at lower rates if they do not avail specified exemptions/deductions.
- (ii)      In order to help small and medium enterprises, the Bill proposes to raise the turnover threshold for compulsory tax audit from existing Rs. 1 crore to Rs. 5 crore in case where cash receipt is not more than 5% of total receipt and cash payment is not more than 5% of total payments.