Taxation Current Affairs - 2020
On December 2, 2019, Lok Sabha passed the Taxation Laws (Amendment) bill, 2019. The main objective of the bill is to provide an option for the domestic companies to pay taxes at the rate of 22%.
The bill replaced the ordinance promulgated by the President in September 2019. The ordinance reduced corporate taxes. The bill aims to amend both Income Tax Act, 1961 and Finance Act, 2019.
The bill provides the domestic companies to pay taxes at the rate of 22%. However, this can be availed only if the companies are not claiming deductions under the Income Tax act. Currently, the companies with annual turn over of Rs 400 crores are paying taxes at the rate of 25% and the companies with annual turn over more than Rs 400 crores are paying taxes at the rate of 30%.
Concessions are provided to those companies that were started after September 30, 2019 and begins manufacturing before April 1, 2023. They can pay taxes at the rate of 15% provided they do not claim deductions from other laws and rules
The companies opting for the new tax rates need not pay Minimum Alternate Taxes (MAT).
The main aim of the bill is to promote growth and investment in domestic manufacturing sector. In order to pull up the economy of the country the Union Government also reduced the corporate tax rates up to 10%. It was the biggest reduction in the last 28 years.
Tags: Bills and Acts • Bills and Amendements • Economic Growth • Finance Act 2019 • Income Tax Act 1961
Union Finance Ministry has notified Sabka Vishwas-Legacy Dispute Resolution Scheme, 2019, a dispute resolution and amnesty scheme to reduce legacy service tax and central excise cases. It will become operational from September 1, 2019 four months till December 31, 2019. It can be availed by taxpayers for closing their pending disputes relating to legacy Service Tax and Central Excise cases that are now subsumed under Goods and Services Tax (GST) so they can focus on GST.
About Sabka Vishwas-Legacy Dispute Resolution Scheme 2019
Objective: To free large number of small taxpayers of their pending disputes with the tax administration.
Two main components of Scheme:
(i) Dispute resolution: It is aimed at liquidating legacy cases of Central Excise and Service Tax that have been subsumed in GST and are pending in litigation at various forums.
(ii) Amnesty component: It provides opportunity to taxpayers to pay outstanding tax and be free of any other consequence under law.
Relief: It provides substantial relief in tax dues for all categories of cases as well as full waiver of interest, fine or penalty. It also provides for complete amnesty from prosecution.
This scheme was announced by Union Finance Minister Nirmala Sitharaman in her Budget speech 2019 to free large number of small taxpayers of their pending disputes with the tax administration. More than Rs 3.75 lakh crore is blocked in excise and service tax litigations.