Govt’s excise collection jumps 48% in April-July; already 3x of full fiscal oil bond liability

Govt’s excise collection jumps 48% in April-July; already 3x of full fiscal oil bond liability

Official data revealed that the government’s revenue from the levy of excise duty on petroleum products increased by 48% in the first four months of the current fiscal year, with the incremental mop-up being three times the payback burden of legacy oil bonds for the entire fiscal year.

Excise duty collections increased to over Rs 1 lakh crore in April-July 2021, according to data from the Union Ministry of Finance’s Controller General of Accounts, up from Rs 67,895 crore in the previous fiscal.

Only petrol, diesel, ATF, and natural gas are subject to excise duty since the implementation of the Goods and Services Tax (GST) regime. All other goods and services, with the exception of these, are subject to the GST.

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The government’s incremental collections of Rs 32,492 crore in the first four months of the fiscal year 2021-22 (April 2021 to March 2022) are more than three times the Rs 10,000 crore liability it has for the entire year to repay oil bonds issued by the previous Congress-led UPA government to subsidise fuel.

The bulk of excise tax revenue comes from the levy on gasoline and diesel, and with sales going up as the economy improves, industry insiders estimate that incremental receipts in the current fiscal year might be over Rs 1 lakh crore higher than the previous year.

In total, the UPA government issued Rs 1.34 lakh crore in bonds (similar to a sovereign promise to pay in the future) to state-owned oil corporations to compensate them for selling fuels such as cooking gas LPG, kerosene, and diesel at below-cost prices.

According to the finance ministry, Rs 10,000 crore is due to be reimbursed in the current fiscal year.

The Finance Ministry distributes Rs 13,386 crore to 25 states as an RLB award.

Finance Minister Nirmala Sitharaman and then-Oil Minister Hardeep Singh Puri both criticised the oil bonds for limiting budgetary capacity to provide relief to people suffering from near-record-high fuel costs.

Last month, Sitharaman rejected out a reduction in excise duty on gasoline and diesel to lower prices, citing the restrictions of payments in lieu of previously subsidised fuel. She estimated the BJP government’s overall obligation to be Rs 1.3 lakh crore.

The bulk of the excise collections comes from petrol and diesel on which the Modi government had levied record taxes last year.

Last year, excise duty on petrol was raised from Rs 19.98 to Rs 32.9 per litre to recoup gains from international oil prices plummeting to multi-year lows due to decreasing demand.

CBDT refunds Rs 67,401 crore to over 23.99 lakh taxpayers between April 1 to August 16

CBDT refunds Rs 67,401 crore to over 23.99 lakh taxpayers between April 1 to August 16

Between April 1 and August 16, the Central Board of Direct Taxes awarded refunds totalling Rs 67,401 crore to over 23.99 lakh Indian taxpayers, according to the Income Tax Department of India.

Income tax refunds totalling Rs 16,373 crore have been issued in 22,61,918 cases, while corporate tax refunds totalling Rs 51,029 crore have been awarded in 1,37,327 cases, according to the I-T Department.

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“Between April 1 and August 30, 2021, the CBDT issues refunds of over Rs. 67,401 crore to over 23.99 lakh taxpayers. In 22,61,918 cases, income tax refunds of Rs 16,373 crore were provided, while corporate tax refunds of Rs 51,029 crore were issued in 1,37,327 cases “India’s Income Tax Department sent out a tweet.

 

Between April 1 and August 16, the agency claimed it has provided income tax refunds totaling Rs 49,696 crore to more than 22.75 lakh people.

 The Central Board of Direct Taxes deals with matters related to levying and collecting Direct Taxes and formulation of various policies related to direct taxes.

CBDT is a part of Department of Revenue in the Ministry of Finance. They provides inputs for policy and planning of direct taxes in India, and is also responsible for administration of direct tax laws through the IT Department.

The Central Board of Direct Taxes is a statutory authority functioning under the Central Board of Revenue Act, 1963. The officials of the Board in their ex-officio capacity also function as a Division of the Ministry dealing with matters relating to levy and collection of direct taxes. Historical Background of C.B.D.T

 

The Central Board of Direct Taxes issued refunds of over Rs 67,401 crore to over 23.99 lakh Indian taxpayers between April 1 and August 16, the Income Tax Department of India said on Saturday. 

The I-T Department also stated that income tax refunds totaling Rs 16,373 crore were issued in 22,61,918 cases, while corporate tax refunds totaling Rs 51,029 crore were issued in 1,37,327 cases.

NRI status & Taxable Income in India effective from FY2020-21

NRI status & Taxable Income in India effective from FY2020-21

For non-resident Indians (Indian citizens or Persons of Indian Origin (‘PIO’) who have been residing outside India), until March 31, 2020, NRIs who visited India could stay in India up to 181 days in a financial year and still could maintain “Non-resident” status in India.

The Finance Act, 2020 and the Finance Act 2021 (assented by the President on 28 March 2021) have made far-reaching changes regarding the determination of the residential status of NRIs for the financial year ended March 31, 2021, and March 31, 2022. This change will directly impact the NRI community.

Highlights:-

⦁ Visiting NRIs whose total income (which is defined as taxable income) in India is up to Rs 15 lakh during the financial year will continue to remain NRIs if the stay does not exceed 181 days, as was the case earlier.

⦁ Dividends distributed by Indian companies would be taxable in the hands of the shareholders and as such, would form part of the taxable income. On the other hand, since interest on FCNR and NRE deposits are exempt it will not form a part of taxable income. This amendment is effective from the financial year 2020-21, viz. April 1, 2020, to March 31, 2021.

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⦁ An individual whose taxable income exceeds Rs 15 lakh and stays in India for 120 days or more (but less than 182 days) and is treated as a resident individual will still be treated as “Resident but Not Ordinarily Resident (RNOR)”. In the case of RNOR individuals, the foreign income (i.e., income accrued outside India) shall not be taxable in India. Foreign sources mean income that accrues or arises outside India (except income derived from a business controlled in or a profession set up in

Scope of taxation in India based on Residential Status

1ROR – Resident and Ordinarily Resident,
RNOR – Resident and Not Ordinarily Resident and
NR – Non-Resident

Way forward :

NRIs need to carefully consider the total Indian income and plan their travel itinerary based on the amendment for their period of stay.

The Finance Ministry distributes Rs 13,386 crore to 25 states as an RLB award.

The positive aspect is that in most cases, NRIs can continue to visit India for up to 181 days in the financial year and even in other cases where the period of stay in India is 120 days up to 181 days (and also for 365 days or more in preceding 4 years) or more or in case of Indian citizens who are not tax residents of any other country and are deemed to be tax residents of India, the status would be RNOR (if their Indian Income exceeds INR 15 lakhs) and hence foreign income shall not be taxable in India.