MM TAX CLUB

The tax revenue in the Union Budget for 2021-22 was estimated at ₹22.17 lakh crore against the revised estimates of ₹19 lakh crore, with a growth of 17%. The Union Budget was presented on 1st February, 2021 when the 1st COVID wave had tapered off in India but the world was facing successive waves.

Against the Union Budget estimates of ₹22.17 lakh crore, the revenue collections as per the pre-actual figures is ₹27.07 lakh crore, almost ₹5 lakh crore above the budget estimates. This is a growth of 34% over last years revenue collection of ₹ 20.27 lakh crore, led by growth of 49% in direct taxes and supported by 20% growth in indirect taxes. This revenue growth has been propelled by rapid economic recovery after successive waves of COVID, supported by one of the largest immunization programme of the world run by the Government. It also signifies a robust recovery in the economy. These was also supplemented with better compliance efforts in taxation. Various efforts were taken by tax administration on direct as well indirect taxes to nudge higher compliance through use of technology and artificial intelligence.

2021-22 marks the highest tax-GDP ratio of 11.7%, with direct tax to GDP ratio at 6.1% and indirect tax to GDP ratio at 5.6%. The tax buoyancy (which is a measure of growth in tax revenues as compared to GDP growth) is at a very healthy figure of 1.9, with 2.8 for direct taxes and 1.1 for indirect taxes. The ratio of direct to indirect taxes recovered from 0.9 in 2020-21 back to 1.1 in 2021-22.

The gross corporate taxes during 2021-22 was ₹8.6 lakh crore against ₹6.5 lakh crore last year, which shows that the new simplified tax regime with low rates and no exemptions has lived upto its promise. During the year, Income tax department gave refunds of ₹2.24 lakh core. During last two years, the effort has been to clear backlog of refunds to infuse liquidity into the hands of businesses. During the year, 2.4 crore refunds were issued that included 2.01 crore related to the year 2021-22, for which the returns were filed till 31st March 2021.

This has been possible due to faster processing of returns. During 2021-22, 22.4% returns were processed on the same day and around 75% returns were processed in less than a month time. The average processing time for returns during 2021-22 was 26 days. During the year, 7.14 crore returns were filed as compared to 6.97 crore last year.

On the indirect taxes, GST has seen an exemplary growth during 2021-22 despite two waves of COVID-19 pandemic. CGST revenues increased from ₹4.6 lakh crore last year to ₹5.9 lakh crore in 2021-22. The average monthly gross GST revenue in 2021-22 was ₹1.23 lakh crore as compared to ₹94,734 in 2020-21 and ₹1.01 lakh crore in 2019-20.

This again signifies a robust rebound in the economy. This has been complemented due to various measures taken to improve compliance. The GSTR-3B filing (percentage of returns of previous month filed till end of the month) improved from 74% in September 2020 to 87% in February 2022. The GSTR-1 filing has significantly improved from 54% in September 2020 to 82% in February 2022. This also shows that the gap between GSTR-3B filing and GSTR-1 filing has completely narrowed down to the level of elimination. This shows that the GST ecosystem has appreciated the invoice-based discipline in GST, which not only benefits GST revenues but also contributes to overall formalization in the economy.

The level of economic recovery can also be seen from the value of e-way bills generated every month, which has improved from ₹16.9 lakh crore in January 2021 to ₹25.7 lakh crore in March 2022.

During 2021-22, Customs duty has witnessed a growth rate of 48%. During last two years, Government has undertaken comprehensive review and rationalization of the Customs tariff structure through extensive consultations and crowd sourcing and has rationalized various exemptions and simplified the tariff structure.

It is expected that the trend of recovery in the economy and tax revenues of the Government will continue to grow.

The DGFT vide Public Notice No. 01/2015-20 dated April 04, 2022 has extended the date for implementation of the Track and Trace system for export of drug formulations w.r.t. maintaining the Parent-Child relationship in packaging levels and its uploading on Central Portal for both SSI and non SSI manufactured drugs till March 31, 2023.

In exercise of the powers conferred under Paragraph 2.04 of the Foreign Trade Policy, 2015-20, as amended from time-to-time, the Director General of Foreign 'Trade hereby amends Para 2.90A of Handbook of Procedure- 2015-20, as notified vide Public Notice No. 43/2015-20 dated December 05, 2017 read with Public Notice No. 52 / 2015-20 dated January 05, 2016, Public Notice No. 05/2015-20 dated May 09, 2018, Public Notice No. 43/2015- 2020 dated November 01, 2018, Public Notice No. 16/2015- 2020 dated July 04, 2019, Public Notice No. 66/2015- 2020 dated March 30, 2019, Public Notice No. 16/2015-2020 dated September 22, 2020 and Public Notice No. 46/2015-20 dated March 31, 2021 on laying down the procedure for implementation of the Track and Trace system for export consignments of drug formulations.

In Para 2.90 A (vi) and (vii) of Handbook of Procedure - 2015-20 (as amended vide Public Notice No. 46/2015-20 dated March 30, 2021), "April 01, 2022" may be substituted by "March 31, 2023".

Effect of this Public Notice: The date for implementation of Track and Trace system for export of drug formulations with respect to maintaining the Parent-Child relationship in packaging levels and its uploading on Central Portal has been extended up to March 31, 2023 for both SSI and non SSI manufactured drugs.

The gross GST revenue collected in the month of March 2022 is â‚¹ 1,42,095 crore of which CGST is â‚¹ 25,830 crore, SGST is â‚¹ 32,378 crore, IGST is â‚¹ 74,470 crore (including ₹ 39,131 crore collected on import of goods) and cess is â‚¹ 9,417 crore (including ₹ 981 crore collected on import of goods). The gross GST collection in March’2022 is all time high breaching earlier record of ₹ 1,40,986 crore collected in the Month of January 2022.

The government has settled ₹ 29,816 crore to CGST and ₹ 25,032 crore to SGST from IGST as regular settlement. In addition, Centre has also settled Rs. 20,000 crore of IGST on ad-hoc basis in the ratio of 50:50 between Centre and States/UTs in this month. The total revenue of Centre and the States in the month of March 2022 after regular and ad-hoc settlements is ₹ 65646 crore for CGST and ₹ 67410 crore for the SGST. Centre also released GST compensation of  â‚¹ 18,252 crore to States/UTs during the month.

The revenues for the month of March 2022 are 15% higher than the GST revenues in the same month last year and 46% higher than the GST revenues in March 2020. During the month, revenues from import of goods was 25% higher and the revenues from domestic transaction (including import of services) are 11% higher than the revenues from these sources during the same month last year. Total number of e-way bills generated in the month of February 2022 is 6.91 crore as compared to e-way bills generated in the month of January 2022 (6.88 crore) despite being a shorter month, which indicates recovery of business activity at faster pace.

The average monthly gross GST collection for the last quarter of the FY 2021-22 has been ₹ 1.38 lakh crore against the average monthly collection of ₹ 1.10 lakh crore, ₹ 1.15 lakh crore and 1.30 lakh crore in the first, second and third quarters respectively. Coupled with economic recovery, anti-evasion activities, especially action against fake billers have been contributing to the enhanced GST. The improvement in revenue has also been due to various rate rationalization measures undertaken by the Council to correct inverted duty structure.

The chart below shows trends in monthly gross GST revenues during the current year. The table shows the state-wise figures of GST collected in each State during the month of March 2022 as compared to March 2021.

The Income Tax department has notified forms for filing Income Tax returns (ITR) for financial year 2021-22. ITR forms 1-5 have been notified by the Central Board of Direct Taxes (CBDT).

In exercise of the powers conferred by section 139 read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend Income-tax Rules, 1962, namely:-

1. Short title and commencement.—(1) These rules may be called the Income-tax (fourth Amendment) Rules, 2022.

(2) They shall come into force with effect from the 1st day of April, 2022.

2. In the Income-tax Rules, 1962 (hereinafter referred to as the principal rules), in rule 12,––

(a) in sub-rule (1), in the opening portion, for the figure “2021”, the figure “2022” shall be substituted;

(b) in sub-rule (5), for the figure “2020”, the figure “2021” shall be substituted.

3. In the principal rules, in Appendix-II, for Forms SAHAJ ITR-1, ITR-2, ITR-3, SUGAM ITR-4, ITR-5, ITR-6, ITR-V and ITR- Ack, the following Forms shall, respectively, be substituted,

Access all forms from below link