CBDT issues PAN and TAN within 1 day to improve Ease of Doing Business

In order to improve the Ease of Doing Business for newly incorporated corporates, CBDT has tied up with Ministry of Corporate Affairs (MCA) to issue Permanent Account Number (PAN) and Tax Deduction Account Number (TAN) in 1 day.

Applicant companies submit a common application form SPICe (INC 32) on MCA portal and once the data of incorporation is sent to CBDT by MCA, the PAN and TAN are issued immediately without any further intervention of the applicant. The Certificate of Incorporation (COI) of newly incorporated companies includes the PAN in addition to the Corporate Identity Number (CIN). TAN is also allotted simultaneously and communicated to the Company.

Till 31st March 2017, 19,704 newly incorporated Companies were allotted PAN in this manner. During March, 2017, of the 10,894 newly incorporated companies, PAN was allotted within 4 hrs in 95.63% cases and within 1 day in all cases. Similarly, TAN was allotted to all such companies within 4 hrs in 94.7 % cases and within 1 day in 99.73% cases.

CBDT’s initiative in starting of a business is expected to significantly improve the ranking of India in the Ease of Doing Business Study conducted by World Bank by reducing the number of processes of registration before various authorities under law, reducing the time taken for allotment of the registration number (CIN, PAN, TAN) and making the entire registration process for new companies much simpler.

CBDT has also introduced the Electronic PAN Card (E-PAN) which is sent by email, in addition to issue of the physical PAN Card, to all applicants including individuals where PAN is allotted. Applicant would be benefited by having a digitally signed E-PAN card which they can submit as proof of identity to other agency electronically directly or by storing in the Digital Locker (https://digilocker.gov.in).

Black Money (Searches & Surveys)

Concerted & co-ordinated actions of Law Enforcement Agencies (LEAs) under the Department of Revenue have achieved phenomenal success in fighting the menace of black money during the last three years. 

The period has witnessed unprecedented enforcement actions in direct & indirect taxes. While 23064 searches / surveys have been conducted (Income Tax 17525; Customs 2509; Central Excise 1913; Service Tax 1120); more than Rs. 1.37 lakh crore of tax evasion has been detected (Income Tax 69434; Customs 11405; Central Excise 13952; Service Tax 42727). Simultaneously, criminal prosecutions were launched in 2814 cases (Income Tax 1966; Customs 526; Central Excise 293; Service Tax 29) and 3893 persons were placed under arrest. (Customs 3782; Central Excise 47; Service Tax 64) 

The Enforcement Directorate intensified its anti money laundering actions by registering 519 cases and conducting 396 searches. Arrests were made in 79 cases and properties worth Rs.14,933 crore were attached. 

The Benami prohibition law which remained in-operative for last 28 years was made operational through a comprehensive amendment with effect from November, 2016. More than 245 benami transactions have already been identified. Provisional attachments of properties worth Rs.55 crore have already been made in 124 cases. 

Relevant laws and rules have been streamlined & tightened, plugging the loopholes and strengthening the penal provisions. Effective steps were taken to track & curb cash transactions through various means like penalising cash transaction of more than Rs.2 lakh; limiting allowable cash expense up-to Rs.10000 only; making Aadhaar mandatory for obtaining PAN & filing of income tax returns; making PAN mandatory for cash deposits above Rs.50,000; compulsory linking of PAN with bank accounts; prohibiting cash of Rs.20,000 or more in transfer of immovable property by imposition of a penalty of an equal amount and mandatory reporting of cash deposits above Rs.2.5 lakh in savings accounts and Rs.12.5 lakh in current account during 9 November to 30 December 2016. 

Crackdown against thousands of shell companies engaged in nefarious activities was effected through enforcement actions (searches, surveys, arrests, prosecutions) by the LEAs (IT/ED/MCA/SFIO/CBI). During the last three financial years (2013-14 to 2015-16), Income Tax investigations led to detection of more than 1155 shell companies / entities used as conduits by over 22,000 beneficiaries. The amount involved in non-genuine transactions of such beneficiaries was more than Rs. 13,300 crore. The Ministry of Corporate Affairs has issued more than a lakh notices for striking off names of defunct / non-compliant companies. A High powered group has been set-up for co-ordinating and monitoring the actions taken by departments concerned with the objective of eliminating the conduits of black money generation and application. 

The relentless crusade against black money will get further intensified in the coming days making the tax evaders & money launderers realise that they have to pay a heavy cost for their deviant behaviour.

Tax collections up to March 2017

The total tax revenue targets of the revised estimates for 2016-17 for both Direct and Indirect Taxes was Rs.16.97 lakh crore of which 8.47 lakh crore was for Direct Tax and Rs.8.5 lakh crore from Indirect Tax. It may be recalled that the Revised Estimate figures of 2016-17 was Rs.16.97 lakh crore compared to the Budget Estimates figures of Rs.16.25 lakh crore in 2016-17. As against the Revised Estimate, the provisional figure of tax collection is Rs 17.10 lakh crore, which is a growth of around 18% compared to last year.

Direct Taxes

The provisional figures for Direct Tax collections up to March, 2017 show that net collections are at Rs. 8.47 lakh crore which is 14.2% more than the net collections for the corresponding period last year, which is a major increase compared to the growth rate of the previous FY. Net direct tax collections stand at Rs 8.47 lakh crore which shows 100% achievementfor F.Y 2016-17.

As regards the growth rates for Corporate Income Tax (CIT) and Personal Income Tax (PIT), in terms of gross revenue collections, the growth rate under CIT is 13.1% while that under PIT (including STT) is 18.4%. However, after adjusting for refunds, the net growth in CIT collections is 6.7% while that in PIT collections is 21.0%. Refunds amounting to Rs.1.62 lakh crore have been issued during April 2016-March 2017, which is 32.6% higher than the refunds issued during FY 2015-16.

Indirect Taxes

The figures for indirect tax collections (Central Excise, Service Tax and Customs) in FY 2016-17are at Rs 8.63 lakh crore, which is 22.0%higher than the actual revenue receipts in FY 2015-16. Till March 2017, about 101.35% of the Revised Estimates (RE) of indirect taxes for Financial Year 2016-17 has been achieved.

As regards Central Excise, net tax collections stood at Rs. 3.83 lakh crore during FY 2016-17 as compared to Rs.2.86 lakh crore in the previous Financial Year, thereby registering a growth of 33.9%.

Net Tax collections on account of Service Tax during FY 2016-17 stood at Rs. 2.54 lakh crore as compared to Rs.2.11 lakh crore in the previous Financial Year, thereby registering a growth of 20.2%.

Net Tax collections on account of Customs during FY 2016-17 stood at Rs. 2.26 lakh crore as compared to Rs. 2.10 lakh crore in the previous Financial Year, thereby registering a growth of 7.4%.

Tax Planning

Tax Planning is not to be undertaken from 01st March but from 01st April, so start your tax planning now.

Better late than never, to get the best planning for your savings.

Proxy

A written authorization given by a shareholder for someone else, usually the company's management, to cast his/her vote at a shareholder meeting or at another time.

Benami Transactions (Prohibition) Amended Act, 2016

Though the Benami Transactions (Prohibition) Act, 1988 has been on the statute book since more than 28 years, the same could not be made operational because of certain inherent defects. With a view to providing effective regime for prohibition of benami transactions, the said Act was amended through the Benami Transactions (Prohibition) Amended Act, 2016. The amended law empowers the specified authorities to provisionally attach benami properties which can eventually be confiscated. Besides, if a person is found guilty of offence of benami transaction by the competent court, he shall be punishable with rigorous imprisonment for a term not less than one year but which may extend to 7 years and shall also be liable to fine which may extend to 25% of the fair market value of the property. 

The Benami Transactions (Prohibition) Amendment Act, 2016 came into effect from1st November, 2016. Several benami transactions have been identified since the coming into effect of the amended law. Show cause notices for provisional attachment of benami properties have been issued in 140 cases involving properties of the value of about Rs. 200 crore. Out of these, provisional attachment has already been effected in 124 cases. The benami properties attached include deposits in bank accounts and immovable properties. 

The Government has put in place empowered institutions for efficient implementation of the amended law. In exercise of powers conferred under sub-section (2) of section 28 read with section 59 of the amended Prohibition of Benami Property Transactions Act, 1988, vide Notification No. SO 3290E, dated 25.10.2016 the Central Government has notified specified Income-tax authorities to act as Initiating Officer, Approving Authority and Administrator in respect of benami transactions. Further, vide Notification No. SO 3288E, dated 25.10.2016, the Adjudicating Authority has been notified

Net Indirect Tax collection upto February 2017 stood at Rs 7.72 lakh crore, 22.2% more than the corresponding period last year

The figures for indirect tax collections (Central Excise, Service Tax and Customs) up to February 2017 show that net revenue collections are at Rs 7.72 lakh crore, which is 22.2% more than the net collections for the corresponding period last year. Till February 2017, about 90.9% of the Revised Estimates (RE) of indirect taxes for Financial Year 2016-17 has been achieved.

As regards Central Excise, net tax collections stood at Rs. 3.45 lakh crore during April-February, 2016-17 as compared to Rs.2.53 lakh crore during the corresponding period in the previous Financial Year, thereby registering a growth of 36.2%.

Net Tax collections on account of Service Tax during April-February, 2016-17 stood at Rs. 2.21 lakh crore as compared to Rs.1.83 lakh crore during the corresponding period in the previous Financial Year, thereby registering a growth of 20.8%.

Net Tax collections on account of Customs during April-February 2016-17 stood at Rs. 2.05 lakh crore as compared to Rs. 1.94 lakh crore during the same period in the previous Financial Year, thereby registering a growth of 5.2%.

During February 2017, the net indirect tax grew at the rate of 8.4% compared to corresponding month last year. The growth rate in net collection for Customs, Central Excise and Service Tax was 10.9%, 7.4% and 7.6% respectively during the month of February 2017, compared to the corresponding month last year.