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With the start of the new financial year on April 1, a slew of tax changes are set to take place, including the long term capital gains tax and the E-Way Bill.
While businesses will be able to start generating and using E-Way Bills from Sunday, the impact of the long term capital gains tax will be visible from Monday, when the markets open.
As part of the Union Budget 2018-19, Finance Minister Arun Jaitley has reintroduced a 10 per cent tax on long term capital gains of over ₹ 1 lakh on share of sales.
Tax on share sale
The tax had been abolished in 2004 and is being brought back after 14 years. The Finance Ministry is hopeful that its impact has already been absorbed by the market and is unlikely to affect sentiments by much.
An indexation benefit for computing tax liability on sale of shares listed after January 31 will be available giving partial relief to investors.
“There has been enough discussion on the issue and the government has made its position clear on the need to tax such long term capital gains. We have also tried to address whatever concerns there were,” noted an official.
Till now, a 15 per cent tax was levied on short term capital gains made on share sale within a year of purchase.
The Exchequer expects about ₹ 20,000 crore as revenue from LTCG but expects it to increase in subsequent years as the impact of the grandfathering clause wears off.
E-Way Bill
Meanwhile, the long pending E-Way Bill is also set to kick off from Sunday as part of the goods and services tax. Tax officials as well as businesses are keeping their fingers crossed that it will prove to be a second time lucky for them.
“The benefits of the E-Way Bill need to be shared with trade and industry and our focus should be on ensuring a smooth rollout,” said Vanaja N Sarna, Chairperson, Central Board of Excise and Customs, in a missive, adding that officers also must be attuned to the new compliance system.
The major challenge is about the number of businesses that have registered on the E-Way Bill portal and their state of preparedness.
Software providers too have worked out systems for easier compliance.
“About 26-50 lakh E-Way bills are expected to be generated per day once it starts. The system is being built by NIC to process up to 75 lakh E-Way bills per day. We expect a smooth roll out of the E-Way Bill filing process" said Mr. Sudhir Singh, Managing Director, MargERP.
Firms such as Rivigo have also signed up as E-Way Bills Suvidha Partner to provide tech support and easy generation of the online document.
“The Integration of the FASTag and RFID Tag to the E-Way bill system and the deployment of monitoring systems across the GST regulatory officers, including with their flying squads, has the potential to have substantial improvement in identification of tax-defaulted goods movement,” said Anjani Mandal, CEO and Co-Founder of Fortigo.
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