Today's Headlines

Today's Headlines - 15 May 2023

Government new GST compliance measures

GS Paper -3 (Economy)

In two significant measures to curb tax evasion and increase compliance under the Goods and Services Tax (GST) regime, the government has decided to lower the threshold for businesses to generate e-invoice for business-to-business (B2B) transactions, from Rs 10 crore to Rs 5 crore.

More about the news:

  1. The Finance Minister, in a review of the Central Board of Indirect Taxes & Customs (CBIC), had given directions to roll out an automated return scrutiny module for GST returns at the earliest.
  2. Due to rising instances of GST frauds and cases of fake invoices, these changes are expected to broaden the compliance mandate for more businesses, especially small and medium enterprises and also help boost the GST revenue collections.

Automated return scrutiny module:

  1. This will enable the officers to scrutinise GST returns of centre-administered taxpayers selected on the basis of data analytics and risks identified by the system.
  2. It will help identify discrepancies on account of risks associated with a return, and displaying to the tax officers.
  3. They will interact with the taxpayers through the GSTN common portal for communication of discrepancies noticed in returns and subsequent action in form of either issuance of an order of acceptance of reply or issuance of show cause notice or initiation of audit/investigation.
  4. The automated return scrutiny module has already commenced with the scrutiny of GST returns for FY 2019-20, with the requisite data already with the tax officers.

Changes for e-invoicing:

  1. The government has lowered the threshold for businesses to generate e-invoice for business-to-business (B2B) transactions to Rs 5 crore from Rs 10 crore under GST. The changes will come into effect from August 1.
  2. At present, businesses with turnover of Rs 10 crore and above are required to generate e-invoice for all B2B transactions.

Significance of e-invoicing:

  1. It will enable interoperability across the entire GST ecosystem. It ensures a common standard for all invoices.
  2. With a uniform invoicing system, the tax authorities are able to pre-populate the return and reduce the reconciliation issues.
  3. It is expected to help to curb the actions of tax evaders and reduce the number of frauds as the tax authorities will have access to data in real-time.
  4. E-invoicing was initially implemented for large companies with turnover of over Rs 500 crore, and within three years the threshold has now been lowered to Rs 5 crore.

Implication of this move:

The reduction in the e-invoicing threshold is seen as an important factor for boosting GST revenue collections and checking frauds, it will also increase compliance requirements for smaller businesses.

 

Multipolar world is feasible only by a Multipolar Asia

GS Paper -2 (International Relations)

External Affairs Minister (EAM) S. Jaishankar said in his address to the European Union (EU) Indo-Pacific Ministerial Forum (EIPMF) in Stockholm that Globalisation is the overwhelming reality of our times and there must be a respective appreciation of multipolarity because a multipolar world is feasible only by a multipolar Asia.

More about the news:

He held meetings with his counterparts from France, Austria, Belgium, Bulgaria, Cyprus, Latvia, Lithuania and Romania.


Increasing Indo-EU partnership:

  1. In his address at the EIPMF, he called for “regular, comprehensive and candid dialogue” between India and the EU that is not just limited to the crisis of the day.
  2. He also had discussions with several of his EU counterparts on a range of bilateral issues, including strengthening ties amid the Russia-Ukraine conflict.

3.He reiterated that while there may be historical and cultural divergences, at the end of the day India and the EU are made up of political democracies, market economies, and pluralistic societies.

4.Many transformations in India, like digital public delivery, or green growth initiative, merit the EU’s attention and as India rapidly expands its global footprint, it will intersect with that of the EU more in the coming years.

About Indo-Pacific:

1.He said, geographically, the Indo-Pacific is a complex and differentiated landscape that is best understood through more intensive engagement.

2.He said; Indo-Pacific is increasingly central to the direction of global politics. The more the European Union and Indo-Pacific deal with each other, the stronger will be the respective appreciation of multipolarity.

3.He also talked about the Quad grouping, as a platform for global growth which is important to any evaluation of the Indo-Pacific, with its “agenda and impact” steadily expanding.

 

Campaign to trace, settle unclaimed deposits: RBI

GS Paper -3 (Economy)

The Reserve Bank of India said a special 100 days campaign will be launched under which banks trace and settle their top 100 deposits in every district of the country. The banks will commence the campaign from June 1, 2023.

More about the news:

The issues related to unclaimed deposits were also discussed during the meeting of the high-powered Financial Stability and Development Council (FSDC) headed by finance minister Nirmala Sitharaman.

Unclaimed deposits:

1.The RBI saidbalances in savings/current accounts which are not operated for 10 years, or term deposits not claimed within 10 years from date of maturity are classified as "unclaimed deposits".

2.These amounts are transferred by banks to "Depositor Education and Awareness" (DEA) Fund maintained by the Reserve Bank of India.

RBI’s 100 Days 100 Pays' campaign:

1.Under, this campaign, for banks, to trace and settle the top 100 unclaimed deposits of every bank in every district of the country within 100 days.

  1. This measure will complement the on-going efforts and initiatives by the Reserve Bank to reduce the quantum of unclaimed deposits in the banking system and return such deposits to their rightful owners/claimants.

Other measures by central bank:

1.The RBI has also announced the setting up of a centralised web portal for the public to search unclaimed deposits across multiple banks.

2.The Reserve Bank, from time to time, through its public awareness initiatives, has been encouraging members of public to identify and approach the bank concerned for claiming such deposits.

Data about money:

The total amount of unclaimed deposits transferred to the Reserve Bank of India (RBI) by public sector banks (PSBs) in respect of deposits not operated for 10 years or more was Rs 35,012 crore till February 2023.

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