GST: Finance Minister may hike service tax to 16-18% in Budget

GST: Finance Minister may hike service tax to 16-18% in Budget

New Delhi: Finance Minister Arun Jaitley may hike service tax rate to 16-18 per cent from the current 15 per cent in the Budget, due on Wednesday, as a precursor to the Goods and Services Tax (GST) rollout.

The move, that will make flying, eating out, phone bills and a host of other services expensive, would be an attempt to take the rates closer to the proposed tax slabs for GST.

GST, which will subsume central and state levies like excise duty, service tax and VAT, is scheduled to be rolled out from July 1.

The tax slabs decided for the GST are 5, 12, 18 and 28 per cent and taking service tax closer to one of the slabs is a logical move in the Budget, tax experts said.

Tax experts say, Jaitley, who had in his previous budget hiked service tax rate by 0.5 per cent to 15 per cent, may raise the levy by at least one percentage point to 16 per cent.

Some others feel there could be different service tax rates with a lower 12 per cent for basic services and a higher 18 per cent for the rest.

Also, a higher service tax for April-June will help the government garner more revenue to meet expenses on schemes and programmes it may be planning to contain the impact of demonetisation.

A service tax rate closer to the GST rate will also help consumers avoid a greater price shock when the new national sales tax is rolled out.

While service tax until now is a central levy, it will be equally split between the Centre and states under the new GST regime. Most services, except essential ones like primary healthcare and basic education, will be covered by GST.

Service tax was budgeted to provide Rs 2.31 lakh crore in 2016-17, more than 14 per cent of the Centre’s total tax revenues of Rs 16.30 lakh crore.

This will be the third time that Jaitley will raise service tax rate. Service tax from June 1, 2015 was hiked from 12.36 per cent to 14 per cent. A 0.5 per cent Swachh Bharat Cess was levied on all services, taking the total incidence of service tax to 14.5 per cent from November 15, 2015.

In the last Budget, he imposed a Krishi Kalyan Cess at the rate of 0.5 per cent on all taxable services to take the levy to 15 per cent.

PTI

Government may make Aadhaar must for rail concession in Budget 2017

Government may make Aadhaar must for rail concession in Budget 2017

New Delhi: Government is contemplating to make Aadhaar or Unique Identification (UID) card mandatory to avail rail concession, and an announcement is likely to be made by Finance Minister Arun Jaitley while presenting the first combined General and Railway Budget on February 1.

The move will help the government in better targetting of benefits and check misuse of the facility, sources said.

The Railways provides concession on tickets to more than 50 categories of passengers which include senior citizens, students, research scholars, teacher, doctor, nurse, patients, sports people, unemployed youth, Arjun awardees among others.

At present, Railways is running a pilot project for senior citizens who are entitled for rail concessions.

The concessional tickets cost the Railways about Rs 1,600 crore in 2015-16, with the bulk being accounted for senior citizens.

As per the government data, over 100 crore Aadhaar cards have been issued so for covering bulk of India’s population.

The government has decided to end the 92-year-old practice of presenting a separate Railway budget and merged it with the General Budget.

Jaitley, according to sources, will contribute few pages of his Budget to programmes and schemes related to Indian Railways.

Although there will be a single budget, the Railways will continue to have autonomy as commercial undertaking and the existing financial arrangement will remain.

The Railways is expected to get exemption from payment of dividend to the Union government, a move which will help strengthening its finances.

The organisation will also get budget support to meet part of its capital expenditure and will be allowed to raise extra budgetary resources.

According to sources, Railways would continue to bear the expenditure on social and public service obligations.

It is also expected that Jaitley will present a separate statement of budget estimates and demand for grants for Railways in the General Budget.

There will also be a single Appropriation bill, including the estimates of Railways, to the Parliament.

PTI

Officers to face action for delay in GPF payments to retiring employees

Officers to face action for delay in GPF payments to retiring employees

New Delhi: Action will be taken against the officers concerned in cases of delay in processing payment of General Provident Fund (GPF) to retiring employees, the Centre has said.

The move comes after it was noticed that GPF final payment in many cases was not being made to the government servants immediately after retirement leading to payment of interest for the period delayed.

In an order, the Ministry of Personnel said in order to ensure timely final payment of GPF and to avoid unnecessary financial burden on account of interest, it has now been decided that every case, in which payment of interest on General Provident Fund becomes necessary beyond the date of retirement, shall be put up for consideration to the Secretary of the administrative ministry.

"In all such cases the Secretary of the administrative ministry or department will fix responsibility at all levels to take appropriate action against the government servant or servants who are found responsible for the delay in the payment of General Provident Fund," it said in the directive to all central government departments.

Senior Personnel Ministry officials also said there have been a few instances in which there were complaint of delay in giving final amount of GPF to the retiring employees.

Rules clearly provide that when the amount standing at the credit of a subscriber in the General Provident Fund becomes payable, it shall be the duty of the Accounts Officer to make the payment.

The authority for the amount payable is to be issued at least a month before the date of superannuation, but payable on the date of superannuation, the rules say.

The Centre had in 1996 dispensed with the requirement of submitting a written application by the retiring government servant for GPF final payment.

As per the rules, in case the GPF balance is not paid on retirement, interest on the GPF balance is required to be paid for the period beyond the date of retirement also.

PTI

7th Pay Commission: In 70 years, senior government officials salary hiked from Rs 2,000 to Rs 2.50 lakh

7th Pay Commission: In 70 years, senior government officials salary hiked from Rs 2,000 to Rs 2.50 lakh

The 7th pay commission has recommended a 14.27% increase in the basic pay of government employees.

1. In the last 70 years, the government has announced 7 pay commissions.
2. In 1947, govt officials lowest salary was Rs 55 per month.
3. The 7th pay commission has recommended a hike of 14.27 pc in govt employees salary.

In the last 70 years, the Central government has announced seven central pay commissions. The 7th pay commission has recommended a 14.27 per cent increase in the basic pay of govt employees.

In 1947, after India's Independence, the lowest salary of a central government employee was Rs 55 per month while the senior most officials took home a salary of Rs 2000 per month. After the 6th pay commission, the monthly salary of senior government officials rose to Rs 90,000 with the lowest salary being Rs 7000 per month.

Central Pay Commission's previous recommendations:

Following was the salary slabs of government employees in different pay commissions:

 The government employees' salaries saw a significant rise with the 7th pay commission. Now, after the 14.27 per cent increase in basic salary, the lowest salary has been increased to Rs 18,000 from Rs 7,000 while the salary of senior government officials has gone up to Rs 2.50 lakh from Rs 90,000.

In the last 70 years, the Centre has increased the minimum salary of its employees from Rs 55 to Rs 18,000 per month - a hike of 32,727 per cent.

Whereas the salary of senior officials has seen a quantum jump of 12,500 per cent in the same period, from Rs 2,000 per month to Rs 2.50 lakh.

Source: Indiatoday

Revision of rates of subscription under Central Government Health Scheme as per 7th CPC

Revision of rates of subscription under Central Government Health Scheme as per 7th CPC

No.S.11011/11/2016-CGHS(P)/EHS
Government of India
Ministry of Health and Family Welfare
EHS Section

Nirman Bhawan, New Delhi
Dated the 13th January, 2017

OFFICE MEMORANDUM

Sub: Revision of rates of subscription under Central Government Health Scheme due to revision of pay and allowances of Central Government employees and revision of pension/ family pension on account of implementation of recommendations of the Seventh Central Pay Commission.

In partial modification to this Ministry’s OM of even No. dated 9th January, 2017 on the subject mentioned above, the undersigned is directed to say that the revised rates will be effective from 1st February 2017 instead of 1st January, 2017.

2. Other contents of the above said OM will remain unchanged.

sd/-
(Sunil Kumar Gupta)
Under Secretary to the Government of India
Tel. 23061986

No. S.11011/11/2016 CGHS(P)/EHS
Government of India
Ministry of Health and Family Welfare
EHS Section

Nirman Bhawan, New Delhi
Dated the 9th January, 2017

OFFICE MEMORANDUM

Sub: Revision of rates of subscription under Central Government Health Scheme due to revision of pay and allowances of Central Government employees and revision of-pension/ family pension on account of implementation of recommendations of the Seventh Central Pay Commission.

The undersigned is directed to refer to this Ministry’s OM No. S.11011/2/2008-CGHS(P) dated 20th May, 2009 vide which orders were issued revising the rates of monthly subscription for availing CGHS facility, as also the entitlement for free diet, entitlement of accommodation in private empanelled hospitals under CGHS, etc.

2. Consequent upon revision of pay on the basis of the implementation of the recommendations of the 7th Central Pay Commission, it has been decided to revise the rates of subscriptions, to be made by employees / pensioners, for availing benefits under the CGHS, with effect from 1st January, 2017. It has also been decided to revise the monetary ceiling limits for various entitlements of the beneficiaries for availing CGHS facilities.

3. In supersession of all earlier instructions, the following revisions are being made, in so far as it relates to the facilities mentioned below:

(A) Monthly Contributions for availing CGHS facility:

Sl. No.	Corresponding   levels in the  Pay Matrix  as per 7th CPC	Contribution (Rs. Per month)
1	Level: 1 to 5	250
2	Level: 6	450
3	Level: 7 to 11	650
4	Level: 12 & above	1000

(B)       Entitlement    of wards in private hospitals empanelled   under CGHS:

Sl. No.	Corresponding   Basic Pay drawn  by the officer  in 7th CPC per month	Ward  entitlement
1	Up to  Rs. 47,600/-	General
2	Rs. 47,601/-  to Rs. 63,100/-	Semi-Private
3	Rs. 63,101/-  and above	Private

(e) Monetary Ceiling for Free Diet:
The monetary ceiling for free diet for CGHS beneficiaries is revised to pay/ pension / family pension of Rs. 44,900/- per month.

(D) Monetary ceiling for free diet for beneficiaries suffering from TB or mental disease):

The monetary ceiling for free diet in case of beneficiary suffering from TB or Mental disease is revised to pay / pension / family pension of Rs. 69,700/- per month.

(E) Pay slab for determining the entitlement of Nursing Home facilities in Government / State Government / Municipal Hospitals:

The monetary ceiling for determining the entitlement of nursing home facilities in Central Government / State Government / Municipals Hospitals is revised to pay / pension / family pension Rs. 47,600/- per month and above.

(F) Monetary Ceiling for direct consultation with Specialists in Central Government /State Government /Municipal Hospitals:

The monetary ceiling for determining the entitlement for direct consultation with Specialists in Central Government / State Government / Municipal Hospitals will continue at the existing rates until revision of the same after consultation with Ministry of Finance.

(G) Pay slab for determining the entitlement of accommodation in AIIMS, New Delhi.

The revised entitlement, as per the pay drawn by the officials, is as follows:

Sl . No.	Corresponding   Basic Pay drawn  by the  officer  in 7th   CPC per month	Ward  entitlement
1	Up to Rs. 63,100/-	General
2	Rs. 63,101/-  to Rs. 80,900/-	Private
3	Rs. 80,901/-  and above	Deluxe/Private

4. It is clarified that the reference to pay in this order relates to the pay drawn in the level of pay.

5. Pensioners have an option to get their CGHS pensioner card made by either making CGHS contribution on an annual basis (twelve months) or by making contribution for 10 (ten) years {120 (one hundred and twenty) months} for getting a pensioner CGHS card with life-time validity. It is clarified that:

(i) Contribution to be made by pensioners / family pensioners would be the amount that they were subscribing at the time of their retirement or at the time of death of the Government servant;

(ii) Pensioner beneficiaries, who have already obtained CGHS card with life time validity by paying a lump sum amount equivalent to 10 years’ contribution, will not be required to pay any additional amount as a result of the revision in the rates of contribution for availing CGHS facility;

(iii) Entitlement of pensioners / family pensioners, who have already deposited their contribution for life time CGHS facility, will not be changed.

(iv) Pensioners / family pensioners who are contributing to the CGHS on an annual basis and wish to continue to avail CGHS benefits will have to contribute at the revised rates up to the time of contribution needed to cover a period of a total of ten years from the time pensioner CGHS card was issued for the first time to them. The revised rate of contribution for the remaining period would be with reference to the level of pay that he / she would have drawn in the post held by him / her (at the time of his / her retirement / death) had he / she continued to be in service now but for his / her retirement/ death; and

(v) Any pensioner / family pensioner who is entitled to avail CGHS facility has not so far got his / her pensioner CGHS card made, the rate of contribution in such cases will be with reference to the level of pay that he / she would have drawn in the post held by him / her (at the time of his / her retirement / death) had he / she continued to be in service now but for his/ her retirement / death.

6. This issues with the concurrence of the Department of Expenditure vide their I.D. Note No. 18(1)/EV/2016, dated 24/11/2016.

7. Hindi version will follow.

sd/-
(Sunil Kumar Gupta)
Under Secretary to the Government of India

Authority: http://cghs.gov.in/

TDS on approved Provident and Superannuation Funds as per Income-Tax Act

TDS on approved Provident and Superannuation Funds as per Income-Tax Act

TDS on payment of accumulated balance under recognised provident fund and contribution from approved superannuation fund

Ministry of Finance has issued a circular about details of TDS on approved Provident and Superannuation Funds as per Income-Tax Act

TDS ON PAYMENT OF ACCUMULATED BALANCE UNDER RECOGNISED PROVIDENT FUND AND CONTRIBUTION FROM APPROVED SUPERANNUATION FUND:

    The   trustees of a Recognized Provident Fund, or any person   authorized   by the regulations of the Fund   to  make payment of  accumulated   balances due   to  employees, shall   in   cases where sub-rule(1) of Rule 9 of Part A of the Fourth Schedule   to the Act applies, at the time   when the accumulated   balance due to an employee is paid, make therefrom   the deduction specified in Rule 10 of Part A of the Fourth Schedule to the Act.

The accumulated balance is treated as income chargeable under the head “Salaries”.

Where any contribution   made by an  employer,  including   interest on  such  contributions,  if any, in  an approved Superannuation Fund is paid to the employee,  tax on the  amount so paid shall be deducted by the trustees of the Fund  to the extent provided in Rule 6 of Part B of the Fourth Schedule to the Act. TDS should be at the average rate of tax at which, the employee was liable to be taxed during the preceding three years or during the period, if that period is less than three years, when he was member of the fund.

The deductor shall remain liable to deduct tax on any sum paid on account of returned contributions (including interest, if any)  even if a fund or part of a fund ceases to be an approved Superannuation fund.

As per section 192A of the Act, w. e. f. 01.06.2015 the trustees of the EPF Scheme 1952 framed under section 5 of the EPF & Misc. Provisions Act, 1952 or any person authorized under the scheme to make payment of accumulated balance due to employees, shall, in a case where the accumulated balance due to an employee participating in a recognized provident fund is includible in his total income owing to the provisions of Rule 8  of Part A of Fourth Schedule not being applicable at the time of payment of accumulated balance due to the employee, deduct income tax thereon @ 10% if the amount of such payment or aggregate of such payment exceeds Rs 50,000/-. In case the employee does not provide his/her PAN No., then the deduction will have to be made at maximum marginal rate.

Check the Circular

GST will not lead to job losses at central excise dept, assures Jaitley

GST will not lead to job losses at central excise dept, assures Jaitley

New Delhi: Ahead of the rollout of GST, Finance Minister Arun Jaitley today sought to address concerns of job loss from reduced work of central excise and service tax officials, saying they should have no insecurity as enough work and opportunities will be available to them in the new indirect tax regime.

"I see no reason really for disquiet for the simple reason (that) opportunities which are available to people in service and the matter of policy and constitutional guarantee are all protected," he said at the Investiture Ceremony 2017 and International Customs Day 2017 organised by CBEC here.

Only the nature of activity will change because there will be one national sales tax replacing an array of central and state levies like excise duty, service tax and VAT.

"Important changes and evolutions which take place are never put on the back burner" just because the people who conduct the activity would now have to work in an altered form and environment, he said.

"The number of people required, the kind of opportunity will remain unchanged except that the nature of activity itself changes," he said.

GST, he said, has for last several yeas been considered as a larger part of policy consensus in India and an important taxation reform that will lead to the economic integration of the country.

"Once it takes place you have a situation where taxes (that) are levied by the state (and) by Centre (will) all be integrated into one and therefore resulting in one assessment.

"Multiple systems on assessment which is there at present will evolve into a newer kind of system," he said.

He was responding to Central Board of Excise and Customs (CBEC) Chairman Najib Shah’s remarks drawing his attention to "the rising disquiet in the cadre", saying there were human resource issues in the service.

Jaitley said the revenue to be collected is going to expand and there will be expansion of economic activity as well.

"Therefore even though you have two parallel machineries which could now be converging into similar kind of activities and shared responsibility, I think the future will stand witness to the fact that there will be adequate amount of opportunities to be created and therefore the kind of disquiet in service, the kind of personal pressure I see on you should reduce as there is no real occasion for a fear of this kind or a sense of insecurity for anyone in this service," he said.

The Finance Minister said change and evolution are an integral part of any economic order, and they are never held back because the nature of responsibility is going to change.

"This is an ongoing process it will continue and we will all have to adjust ourselves with this particular change. I can only assure you that there is no reason for disquiet, you can go and have a comfortable sleep tonight,” he told the revenue officials.

Revenue Secretary Hasmukh Adhia told the officers that they will have enough work to do under GST.

The Indian Revenue Service (Customs and Central Excise) Officers Association has asked the government to protect the sanctity of their service amid attempts by officers of state government VAT departments to equate themselves with IRS (Customs and Central Excise) officers.

PTI

Budget may bring good news for salaried people

Budget may bring good news for salaried people

New Delhi: Every year when the Union finance minister presents the Budget speech, the ‘salaried people’ looks to him with expectations for reducing their tax liability.

It is possible that there would be some moves in this regard in the coming one.

The salaried people could get some relief as finance minister Arun Jaitley is likely to raise the minimum income threshold for paying personal income tax for those below 60 years of age to Rs 3 lakh a year from Rs 2.5 lakh at present and the deduction limit under Section 80C to Rs 2 lakh in the Union Budget for 2017-18, multiple sources told The Sen Times.

Currently the tax exemption slab is at Rs 2.5 lakh for individuals below 60 years, while deduction under Section 80C is Rs 1.5 lakh.

Union Finance Minister Arun Jaitley raised the personal income tax exemption limit from Rs 2 lakh to Rs 2.50 lakh on July 11, 2014 in the Union Budget for 2014-15.

Jaitley may also raise section 80C deductions limit to Rs 2.0 lakh, the sources said.

This move aimed at boosting household savings. The hike in deductions limit for investments by individuals in financial instruments to Rs 2.0 lakh would come as a sigh of relief for the salaried people blatting high inflation.

Investments under Section 80C up in popular tax saving instruments such as the general provident Fund, public provident fund, NPS, national savings scheme, unit-linked insurance plans and equity-linked savings schemes are not taxed up to the allowed threshold.

Section 80C was introduced by the UPA government in 2005-06 with a limit of Rs 1 lakh but UPA government did not revised it since then. Jaitley raised it up to Rs 1.5 lakh in the Union Budget for 2014-15.
Deduction on payment of income tax on interest paid on loans for self occupied houses may be also raised to Rs 2.5 lakh from Rs 2.0 lakh, the sources added.

Union Finance Minister will present the Union Budget on Wednesday.

TST

Clarifications on implementation of GAAR provisions under the Income Tax Act, 1961

Clarifications on implementation of GAAR provisions under the Income Tax Act, 1961

The General Anti Avoidance Rule (GAAR) provisions shall be effective from the Assessment Year 2018-19 onwards, i.e. Financial Year 2017-18 onwards. The necessary procedures for application of GAAR and conditions under which it shall not apply, have been enumerated in Rules 10U to 10UC of the Income-tax Rules, 1962.The provisions of General Anti Avoidance Rule (GAAR) are contained in Chapter X-A of the Income Tax Act, 1961.

Stakeholders and industry associations had requested for clarifications on implementation of GAAR provisions and a Working Group was constituted by Central Board of Direct Taxes (CBDT) to examine the issues raised. Accordingly, CBDT has issued the clarifications on implementation of GAAR provisions today.

Amongst others, it has been clarified that if the jurisdiction of FPI is finalized based on non-tax commercial considerations and the main purpose of the arrangement is not to obtain tax benefit, GAAR will not apply. GAAR will not interplay with the right of the taxpayer to select or choose method of implementing a transaction. Further, grandfathering as per IT Rules will be available to compulsorily convertible instruments, bonus issuances or split / consolidation of holdings in respect of investments made prior to 1st April 2017 in the hands of same investor. It has also been clarified that adoption of anti-abuse rules in tax treaties may not be sufficient to address all tax avoidance strategies and the same are required to be tackled through domestic anti-avoidance rules. However, if a case of avoidance is sufficiently addressed by Limitation of Benefits (LoB) provisions in the tax treaty, there shall not be an occasion to invoke GAAR.

It has been clarified that if at the time of sanctioning an arrangement, the Court has explicitly and adequately considered the tax implications, GAAR will not apply to such an arrangement. It has also been clarified that GAAR will not apply if an arrangement is held as permissible by the Authority for Advance Rulings.

Further, it has been clarified that if an arrangement has been held to be permissible in one year by the PCIT/CIT/Approving Panel and the facts and circumstances remain the same, GAAR will not be invoked for that arrangement in a subsequent year.

The proposal to apply GAAR will be vetted first by the Principal Commissioner of Income Tax / Commissioner of Income Tax and at the second stage by an Approving Panel headed by a judge of High Court. The stakeholders have been assured that adequate procedural safeguards are in place to ensure that GAAR is invoked in a uniform, fair and rational manner.

Government is committed to provide certainty and clarity in tax rules. Further clarifications, if any, on doubts of stakeholders regarding GAAR implementation, will also be provided.

PIB

Review of CSSS officers in the Grade of Personal Assistant under FR 56 (j) and Rule 48 of CCS(Pension) Rules, 1972

Review of CSSS officers in the Grade of Personal Assistant under FR 56 (j) and Rule 48 of CCS(Pension) Rules, 1972

Reminder

No. 25/9/2016-CS-II(C)
Government of India
Ministry of Personnel, Public Grievances and Pensions
Department of Personnel & Training

3rd Floor, Lok Nayak Bhawan,
Khan Market, New Delhi-11 0003
Dated: 25th Jan, 2017

OFFICE MEMORANDUM

Subject: Review of CSSS officers in the Grade of Personal Assistant under FR 56 (j) and Rule 48 of CCS(Pension) Rules, 1972-reg.

The undersigned is directed to refer to this Department's D.O. letter No. 3/8/2015-CS.1 (D) dated 26.02.2016 and subsequent reminders dated 08.11.2016, 29.11.2016 and 23.12.2016 vide which all the cadre units of CSSS were requested to furnish the inputs in the format annexed therewith with respect to the officers who in the opinion of Ministry/Department, are covered under extant provisions of FR 56 (j)/Rule 48 of CCS(Pension) Rule, 1972. However, the inputs sought in respect of PA Grade are still awaited from several Ministries/Departments.

2. It is, therefore, once again requested to all the defaulting cadre units to furnish the requisite information in respect of PA Grade who are due to review under the provisions of FR 56U) to this Department within a week positively.

(Pradeep A)
Under Secretary to the Government of India
Tel: 24623157

To
Under Secretaries of all defaulting Cadre units of CSSS
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