PM Modi to review GST, black money policy on Tuesday

Prime Minister Narendra Modi at a rally in Shimla. Photo: PTI

In a meeting on Tuesday, May 2, Prime Minister Narendra Modi will review the revenue department's effort to crack down on the circulation of undisclosed ('black') money in the economy.

This is in the wake of the tepid response to the Pradhan Mantra Garib Kalyan Yojana. The income declaration scheme, launched after currency demonetisation, elicited disclosures worth only Rs 4,600 crore.

In the meeting, the PM will also review the department's preparedness on the nation-wide goods and services tax (GST), scheduled for launch on July 1.

Revenue secretary Hasmukh Adhia will give a presentation on the department's performance over the past year and the plan for the current financial year (which began on April 1). Also present would be the heads of the Central Board of Direct Taxes (CBDT) and Central Board of Excise and Customs (CBEC), Sushil Chandra and Vanaja Sarna, respectively.

"The PM will go through our future strategy and give inputs," said a senior official.

The government aims to stay with the July 1 implementation date for GST, despite business wanting this deferred till September 1. The revenue department will highlight the outreach efforts to spread awareness. It is to organise awareness camps in towns with a population of 100,000 and more; it has also asked states to conduct training for their legislators.

Telangana and Bihar have passed the State GST Bills in their legislatures; Rajasthan is scheduled soon. By mid-May, 14 states should have enacted this, and all by May 31.

Adhia might also highlight the progress on restructuring of the CBEC to a Central Board of Indirect Taxes and Customs. On direct taxes, the department would stress the growth in collection for 2016-17, when advance tax and self-assessment tax grew at the highest rate in five years.

Advance tax grew by 15 per cent in 2016-17 versus 7.5 per cent earlier. Self-assessment tax grew 24 per cent, from five per cent the previous year. Income tax returns grew 21.7 per cent and gross collection by 16 per cent, again the highest in five years. Net collection was the highest in three years at 14 per cent, despite higher refunds.

The department will give an update on the second phase of 'Operation Clean Money', recently launched to identify persons for detailed investigation. In the first phase, around 1.8 million people were identified for excessive cash deposits during demonetisation, with online responses requested on such transactions. Of those, 946,000 responded. At least 60,000 individuals, including 1,300 described as 'high risk', have been identified for investigation on excessive cash sales during the demonetisation period. At least 6,000 high value property purchases and 6,600 cases of outward remittances are under the scanner.

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