Economic fundamentals remain strong, says FM Sitharaman

The Government is working towards the goal of reaching 8 per cent growth rate. “Even though there are discussions on whether the economic growth has come down to 5-6 per cent from 8 per cent, our base is strong as it was when it was 8 per cent growth,” said Finance Minister Nirmala Sitharaman. The various announcements in the Budget and initiatives taken by the Government in the past will help in achieving the 8 per cent growth rate, she told in an interaction with economist, industry leaders and various trade bodies.

‘Fundamentals are good’

Equity, bond and currency markets were equally doing well from Monday after the Budget was presented in the Parliament. Bond market rate remained low, dividend in the equity market went up and currency has been stable, she said.

"When the international markets are fluctuating, Coronavirus and US-China trade war are impacting markets, if one Budget is able to maintain all these three markets in good level, it is only Narendra Modi's Budget. The macroeconomic fundamentals are good and since the Budget has also been good, these three markets are doing well," she added.

GST compliance

Later speaking to newspersons, Sitharaman said that the Centre is taking up a number of steps to plug the loopholes in Goods and Services Tax (GST) collections particularly in areas where misuse or gaming of the system is happening. While there was a dip in GST in between, in the last three months the collection has exceeded ₹1 lakh crore every month, she said. The arrears of share in GST to states will be paid in two instalments. No State is being sidelined, she said in a reply to a query on Tamil Nadu's pending GST dues.

Elaborating on the steps taken by the Finance Ministry to improve GST compliance, Revenue Secretary Ajay Bhushan Pandey, said that the GST collection in November was ₹1.04 lakh crore; in December it was ₹1.03 lakh crore and in January it was ₹1.11 crore. While the economy has also improved, the ministry is taking several measures to improve compliance using data analytics, he said.

For instance, using data from the Income Tax department; GST department; Customs department, and from the export and imports, the government is trying to match and identify exactly where the problems are and where the taxes are not being paid to the extent that the tax should have been paid.

For example, the total number of GST taxpayers in registration is around 1.20 crore lakh. “So every month, we are generating a red flag report, not of in terms of lakhs of people, because we believe that a large number of taxpayers are compliant but a few thousands who are not. We are generating red flag reports where mismatches are happening. We are also sending an SMS to all those taxpayers where we are finding the mismatch,” he said. If the difference is large, a communication is sent to both taxpayer and to the tax officials, he added.

“We will continue this further and will further, improve the collection through data analytics and artificial intelligence so that the people who are trying to gain the systems are identified in their pursuit. And then the honest taxpayers can be completely free of any hassles,” he said.

Tax dispute resolution schemes

On tax payment issues, Dubey said in the Vivaad to Viswas scheme, there could be disputes in any areas, including taxability, interest, exemptions, deductions and depreciation and DDT. The scheme is open to all regardless of where the dispute has arisen. At any point, if a tax dispute arises then if appeals are pendinge, every taxpayer can take advantage of this scheme, he said.

It is one of the very attractive tax dispute resolution schemes where by only paying tax, the entire penalty and interest are waived, and people can take advantage. Another important thing is that in order to avail this scheme one does not have to approach any Income Tax office or officer or go to some accountants or Chartered Accountant. As soon as the Bill gets passed by the Parliament, the government put out a completely electronic interface where the people would go and apply for this scheme. They will know exactly what the dispute is and how much tax has to be paid. And then once the tax gets paid by March 31, the dispute will be over then.

If the appeal has been filed by the department, it will withdraw the appeal. Once this is done, no more threat of any further prosecution or any further penalty or harassment, and nothing will happen, he maintained.

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