Revenue Secretary Ajay B Pandey has only nine months before the fiscal ends to meet his revenue targets. BusinessLine caught up with Pandey to understand the roadmap he has set to meet his targets and how much revenues he expects to earn in the limited time from the announcements made in the Budget. The government expects to earn over ₹30,000 crore from various tax proposals such as hiking excise duty on petrol-diesel and tax on super-rich. Excerpts:

Budget documents reveal that fuel prices can go up by ₹5 a litre, while annexures of the Finance Minister’s speech show a lower hike. Is there a discrepancy? How much earnings does the government expect from various tax proposals?

What you see in the Budget documents is just an enabling provision. The actual increase is only ₹2 a litre or so. In a year we will get around ₹30,000 crore from higher excise duty on petrol and diesel. However, since we are left with only nine months, we should be able to get around ₹22,000 crore.

We expect ₹12,000 crore by taxing the super rich, but we have given concession to the industry for the corporate tax of about ₹4,000-5,000 crore. So if you consider all this we should be getting around ₹30,000 crore for the nine-month period.

Why levy 30 per cent gift tax on NRIs?

It is basically to assert our right to tax. Internationally what happens is that the taxation rights arise in the country where the income is generated. Supposing the money moves from India as a gift to some other country then the recipient will have to pay the tax. But, if the person is a non-resident and he/she is getting a gift then India doesn’t get a right. What we have provided is that if he/she is a non-resident and money is going from India then India has the right to tax.

What happens is that he will pay tax in India and get tax credit in the other country. So basically it is to ensure that our tax doesn’t get shifted to some other country even though the money has gone from India.

There were expectations that some clarity will come on retrospective tax, but the Budget is silent on it?

The matter is under arbitration, so we don’t want to touch it.

The Budget has lowered the tax revenue projection. Is this a realistic number? But if we talk about the provisional number as provided by the Controller-General of Accounts for the fiscal 2018-19, growth required will be 20 per cent plus...

Yes, the number is realistic. We have scaled down as per the Budget Estimates given in the Interim Budget because based on the actual collection and current economic situation we have made a realistic assessment.

Basically after assessing the situation we have got the number. No it is not an over-estimated number. We have higher estimate for excise and we increased the excise duty on petrol and diesel.

GST collections are down and so are the projections. What is the real reason for it? Will the merger of two standard rates 12 and 18 per cent be delayed?

There are two reasons for this. One is the rate reductions that have taken place in the last two years that have impacted our revenues. The actual rates were lower than the revenue neutral rates which we had, and then multiple times rate reductions happened — the value of these reductions were ₹92,000 crore a year.

The second reason is the GDP growth rate. If your economy grows at a certain rate then your revenue will have to accordingly.

Merger of the rates whenever it takes place will have to consider the revenue neutral rate. The item at the lower rate will move to higher rate. Whenever it happens we have to keep in mind the multiple economic strata of people we have.

The stock market does not appear to be happy with the Budget as it has not addressed issues related with Long Term Capital Gain Tax and Dividend Distribution Tax?

When you plan the economy of the country it has to come with a reason. What happens to the market on a day-to-day basis, I don’t think should be of much concern. The Budget is the document which gives you a roadmap not only for a year, five-year, but at times 10 years and we should have that broad vision.

Tax deducted at source of 2 per cent for cash withdrawal above ₹1 crore, will this also be levied on withdrawal for personal uses? How will you track such transactions?

This will apply to everyone. The idea is that in this digital scenario and where 10 crore MGNREGA workers also are being paid every 15th day through direct transfer of money in their bank accounts, the need for such withdrawal should be very limited.

Ideally we should not be getting any TDS from this because everyone should be making payments through digital means. Besides, if someone is withdrawing this much cash he must be having that much income also and therefore the TDS that he has paid can be adjusted against the advance tax he paid on the quarter. It is not additional revenue.

The proposed interchangeability of PAN and Aadhaar. Does this mean PAN will be phased out and there will one nation, one financial identity?

I don’t think so. The choice is with the people. If the person gives Aadhaar then the PAN number will be generated at the back end and we will communicate that number. Today, 22 crore PAN has been linked to Aadhaar whereas more that 120 crore people have Aadhaar. So in one stroke these people have been given PAN.

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