Replying to a discussion on the Finance Bill, which was approved by the Lok Sabha, the minister also justified the Budget proposal to tax any income from the transfer of virtual digital assets (VDA), such as cryptocurrencies, at 30%.
Finance minister Nirmala Sitharaman on Friday said the Russia-Ukraine conflict has adversely affected all countries in the form of elevated oil prices and caused a massive disruption in the global supply chains.
Replying to a discussion on the Finance Bill, which was approved by the Lok Sabha, the minister also justified the Budget proposal to tax any income from the transfer of virtual digital assets (VDA), such as cryptocurrencies, at 30%.
“We are very clear. Until we decide whether to regulate or ban it (crypto), we are taxing it. There is definitely commonplace knowledge that lots of transactions are happening. So obviously the government made its position clear that we shall tax the money,” Sitharaman said.
She sought to blunt the Opposition’s criticism that the government has only added to the woes of common man. She stressed that the Modi government believes in lowering taxes. The sharp cut in the corporate tax in 2019 to as low as 15% for new manufacturing units, just before the pandemic hit the nation, has “helped the economy, government and companies, and we are seeing the progress”. As much as Rs 7.3 lakh crore has been collected as corporate tax so far this fiscal,” she added.
The number of taxpayers, too, has risen to 9.1 crore from 5 crore a few years ago, she said. The government has stepped up efforts to widen the tax base and the faceless assessment has been received well by people, she added.
Oil marketing companies, having kept a freeze on price hikes for about five months in the build-up to the crucial state elections, has increased the rates of petrol and diesel by 80 paise per litre for a third time this week on Friday.
Moreover, a 1% TDS (tax deducted at source) will also be levied on payments made on the transfer of digital assets.
On the TDS issue, Sitharaman said the move is essentially for tracking the transactions; it is not a new tax. “The person who is paying the TDS can always reconcile it with his other taxable income. That is the reason, in general, our tax base is widening and TDS is a legitimate way for tracking the transactions and widen the base.”
Amid criticism by the Opposition over issues ranging from burden on the common man to the latest fuel price rise, Sitharaman stressed that the government has taken a conscious call not to fund the recovery in the aftermath of the pandemic through any additional taxes.
Citing an OECD report, Sitharaman pointed out that 32 countries have increased various taxes during the pandemic. “(But) We have not done that last year, nor have we done it this year,” she said.
“Instead, we put more money where multiplier effect would be maximum,” she said, referring to the Budget’s critical focus on sharply raising capital expenditure.
The Budget for FY23 raised the Centre’s budgetary capex by 35.4% to a record Rs 7.5 lakh crore to continue the public investment-led recovery of the economy in the aftermath of the pandemic.
The Finance Bill was approved by the Lok Sabha by voice vote on Friday after accepting 39 official amendments moved by Sitharaman.
Responding to the charges that people are being imprisoned for errors in GST filing, the minister said: “Only section 132 in CGST Act provides for it for specific cases like evading taxes, deliberate tampering of records and false information with intent to evade… Imprisonment is only in cases of serious nature and not for minor mistakes or errors.”
On the allegation that arrests are being made under the Prohibition of Money Laundering Act (PMLA) without registering FIRs, Sitharaman said: “First of all, offences under the PMLA are invariably linked to some other offence listed in the schedule of the Act. So, unless there is an offence, for which there is an FIR, a predicate offence cannot be picked up by the ED. The ED always comes in following the trail of the main offence.”
