If revenue drops after higher import duties on gold, we will be happy, says Revenue Secretary Bajaj

Revenue Secretary Tarun Bajaj said higher import duties on gold were not meant to boost revenue. In an interview with Activity area, he clarified that once the windfall profits for upstream enterprises stop, the windfall tax will automatically disappear. Extracts

After the imposition of an export tax on petrol, diesel and ATF and a tax on domestic crude, the government will review the situation every fortnight depending on price developments international. Does this mean that the new levies come with a sunset clause?

We will review the situation every 14 days as international prices also fluctuate for gasoline, diesel and ATF on one side and crude on the other. Suppose if prices drop significantly, we would like to reduce taxes. We don’t want these companies to feel like they’re paying the windfall tax when there’s no windfall gain. It’s a look. We don’t want to say how long it would last, but that’s the formula. We will continue to monitor fortnightly, and if we find that there is no windfall profit they are making, the new levies would automatically disappear.

Is it correct to say that oil marketing companies will not have to pay tax if they import crude oil?

There is no additional tax on imported crude. This trades anyway at international prices. The tax applies to crude produced in the country. Domestic upstream companies produce rough in the country. Their manufacturing cost is almost the same, excluding inflationary impact.

Plus, they get margins. But the price of crude oil went from $70-80 a barrel to $120 a barrel, which means they’re making $40 more. We ask that out of $40, give a portion to the government in the form of taxes. This crude is used to make diesel, gasoline and ATF. The prices of these products on the world market have increased further.

After the supply of crude, you have to spend money to refine it, and then there is a margin called Cracks (differences between crude oil and the prices of wholesale petroleum products derived from it, such as gasoline, diesel and ATF). The cracks even grew further. So if crack was earlier let’s say $12-14 and now it’s $50 which means the refiners get an extra $30-40 we say share some with the government in the form of taxes and keep the rest. And they will get the rough for the same price whether they import it or buy it from domestic producers here. This means there is no trade-off and no impact on end consumers.

The availability of diesel, gasoline and ATF could improve in the domestic market as the government also has a quota. So if you have to export two units, you have to give one unit to the oil marketing companies or put it in your own gas pumps. Because we have imposed an export duty on the refiners, suppose if their margin is $50 a barrel and we impose a duty of $30, they get $20 a barrel. When national oil marketing companies source from them, they will be able to obtain products at a lower price than international prices because of this right. Oil marketing companies will therefore benefit from this measure.

Do you expect a few shorts of product price rationalization in the domestic market?

This will not affect the final price to the consumer but will not create arbitrage. It will not distort the market. This could help a) greater availability of diesel, gasoline, ATF on the domestic market and b) national oil marketing companies will be able to buy these products at a lower price than what they bought until now. now. In this case, under-recoveries or losses of oil marketing companies are likely to decrease

What kind of revenue do you estimate from the increase in import duties on gold?

We are not targeting revenue through an increase in import duties on gold. If income goes down, we will be happy. This measure was not taken to increase revenue but to reduce the importation of gold and ensure the reduction of India’s current account deficit. Some items are massively imported into the country, some of which are inelastic, such as petroleum and metal products, which we have to import. But there are some commodities like gold that we believe can be controlled. If we can reduce imports, it will help the economy in the current circumstances.

There are fears that higher duties will lead to increased smuggling…

Our analysis so far indicates that smuggling is not directly correlated with a higher duty. In fact, higher duties have sometimes been accompanied by higher imports. However, this time, due to a somewhat higher duty, we expect imports to decrease. If imports go down, that will be good.

Now coming to GST, what will be the roadmap for GST over the next year?

The 47th meeting of the GST Council, held last week, took decisions on how to improve the GSTN. We will implement, some of them in the next three months, some in 6, some in 9 and some in the next 12 months. The implementation will improve player compliance and also hit the unscrupulous. We are also taking steps to make life easier for taxpayers.

Consider, for example, a ruling involving small businesses selling their products through e-commerce operators without registering for GST. Thirdly, we’d like to see some structural changes that everyone keeps talking about in GST, so that GST becomes an absolutely stable tax rate regime in the next year or two, where people should be focusing about their business and not bother during a quarterly board meeting, and they can be considered routine business. Our effort is to make life easier for taxpayers and improve revenues.

What kinds of changes are being made to the electronic invoicing system?

E-invoicing started with those having an annual turnover of ₹500 crore, then reduced to ₹100 crore and now to ₹20 crore. We plan to bring it down to ₹10 crore first and then to ₹5 crore. There is a timetable to lower the threshold to ₹10 crore but before that we want stability in the computer system. The number of ratings between 10 and 20 crore would increase significantly, so we want to be sure that our computer system is good. GSTN is working on the plan, and it should be ready in the next 3-4 months.

What’s your plan for keeping tabs on high-risk assessments?

We have already worked in this direction. We plan to strengthen our efforts and use AI and ML. We have a lot of data ourselves, and now we also collaborate with data from direct taxes, corporate affairs, state data, etc. and build algorithms to keep tabs on these risky ratings.

A GoM has also been formed, and at the recent Council meeting their first set of suggestions were accepted to use computer systems to ensure we don’t even let suspicious people on board GST. For example, we will see if a suspect/offender PAN number in one state is not registered in another state. Also, if an applicant has given an address such as XYZ, South Moti Bagh, New Delhi, we will say that is not the correct address. The applicant is risky and requires physical inspection. These parameters will be defined through the IT platform which will help eliminate those at risk. In addition, Aadhaar authentication and geo-mapping will also be done. Once we have made such a mapping, we also realize whether said location has 50 records or 100. Thus, the system is enhanced with the help of machine learning and AI. Once all of this is in place, we will know that a particular assessment is risky and will monitor it. We will do his Aadhaar authentication, PAN number and CA number as mentioned in the electricity bill to see if the said person is running a factory. Once we have done all of these things, we will ensure that these people do not enter the GST arena.

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