Press Release

Section 11A as Proposed in the Budget for Exceptional Cases only - Sanjay Malhotra, Revenue Secretary, Ministry of Finance

The conference saw in-depth analysis of both direct and indirect tax related proposals contained in the recent budget.

The Associated Chambers of Commerce and Industry of India (ASSOCHAM) today organised a Post Budget Conference to undertake an analysis of tax-related proposals. The conference saw in-depth analysis of both direct and indirect tax related proposals contained in the recent budget.

Speaking at the inaugural session, Shri Sanjay Malhotra, Secretary, Department of Revenue, Ministry of Finance said, “Consultation is an important part of the budget process and many of the proposals we received from industry bodies like ASSOCHAM has been incorporated in the budget and in the finance act. Simplification of capital gains is one such example and we look forward to your continuous feedback. The proposed insertion of Section 11A in GST Act is aimed at removing ambiguities and must be invoked only in exceptional cases and not resorted to as the norm.”

Highlighting the role of the industry, he said “Not only are you the taxpayers, but you are also the tax collectors, the tax deductors and the eyes and ears of the government. I am confident that you will continue to support the government in this endeavour to raise revenue for the welfare of the country and I assure you that the government’s efforts have always been to make life as simple as possible while you are paying your taxes.”

On the changes in the Capital Gains tax, he said “The changes in the capital gains tax has been brought because all of you asked for it and we must know that simplification does not always mean that rates or the tax incident will ultimately go down. It is a simplification measure and not a tax increasing or a revenue increasing, revenue augmenting measure. The revenue increase is marginal at 10 to 12.5 percent and we will all benefit by avoiding the burden of complexity.”

Shri Ravi Agrawal, Chairman, Central Board of Direct Taxes, (CBDT), Ministry of Finance in his special address said, “The provisions introduced in the budget relating to direct taxes can be broadly categorized into simplification, standardisation and compliance. The purpose of tax administration is not penalty and prosecution but to provide comfort to the taxpayers. We are one of the leading nations to provide the facility of pre-filled forms and compliance has improved because of that. Last year we saw about 8.5 crore income tax returns, which is a significant increase. Also, about 72 lakh updated returns were filed indicating the enhanced ease in compliance.”

“The Honourable Finance Minister has announced that we would be reviewing the Income Tax Act. The underlying thought here is that how do we rationalize and how do we make it simple for the taxpayer to actually navigate through the act and to the extent possible, their need for taking help or assistance of a professional may be minimized, at least for the common taxpayer. We will be working on it. And I hope that in the next few months, we should be able to make a comprehensive review.” He added.

Shri Sanjay Kumar Agarwal, Chairman, Central Board of Indirect Taxes & Customs, (CBIC), Ministry of Finance said, “The goal of the government is to make India a developed nation by 2047. Looking at the budget from this perspective, the indication is clear that we need simplified taxation and rationalised rates to ensure that our industries remain globally competitive. The budget proposal to reduce to zero import duty on 25 critical minerals will give a significant boost to domestic manufacturing. The reduction of BCD for critical mobile components to 15% reflects the sector's maturity and deeper value chain.”

“GST revenue growth of the last financial year has outperformed GDP growth, reflecting the inherent efficiencies in the GST tax regime and improve compliance levels.  The proposed amendments to reduce the pre-deposit amount required for filing appeals at first stage and second stage to 10% with a cap of 40 crores (which comprises of 20 crores for CGST and 20 crores for SGST) will ease cash flow for businesses. The comprehensive review of the rate structure to be conducted over the next 6 months will seek to rationalise and simplify the rate structure to facilitate ease of trade, address duty inversions and reduce disputes.” he added.

At the Post Budget Conference on Analysis of Tax-Related Proposals, Shri Rahul Garg, Advisor, National Council on Direct Taxes, ASSOCHAM, set the context on the Direct Tax matter. He emphasized that the budget aims to enhance industry competitiveness by aligning with the industry’s goals. He mentioned the progress in simplifying compliance through digitization, though he acknowledged ongoing challenges due to complex laws that sometimes hinder effective digitization. Furthermore, he underlined the need for a two-way effort to streamline processes where digitization may become ineffective and to adapt laws to better accommodate digital advancements.

Shri Pratik Jain, Chairman, National Council on Indirect Taxes ASSOCHAM focused on the Indirect tax matter. He underscored the importance of simplifying the tax structure and expanding the GST framework to include additional products. Jain also praised the government’s initiatives to streamline customs processes and support Make in Indi.  Overall, he lauded the Union Budget for aligning with the government’s goals of enhancing simplicity, transparency, and stability in the tax system.