Jaitley may cut taxes, lack of indirect-tax data may make it tough

Battling slump in demand after shock demonetisation, Finance Minister Arun Jaitley may look to spur consumption through lower taxes in next week's Budget 2017 Date , but he faces a peculiar situation as precise projections of indirect tax collection in 2017-18 are unavailable due to GST.

Finance Ministers usually weave around their welfare spending proposals based on projections of direct and indirect tax collections in the fiscal.

Projections of collection in direct taxes, made up of personal and corporate tax, would be available but with the rollout of Goods and Services Tax (GST) deferred till July 1, no reliable projection of indirect tax collection for 2017-18 fiscal is likely to be available, tax experts said.

The GST is also to subsume state VAT.                                                

And typically the Centre would account for roughly half of the total nationwide GST revenues after excise, service tax and VAT are subsumed and weave around its budget.

But this year is peculiar, experts say. "No reliable projection of the GST revenue is available because the GST Council is yet to decide which product or service will be taxed at what rate. In absence of that one cannot have a reliable projection of GST revenue collection," a tax expert said.

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Budget 2017: Centre may scrap Rs 4,500-cr PDS sugar subsidy

Finance Minister Arun Jaitley might not offer Rs 18.50 per kg subsidy for purchase of sugar to states for selling at a subsidised rate via ration shops in his February 1 Budget 2017 and save about Rs 4,500 crore.

The Centre's contention is that there is no demarcation for BPL families in the new Food Law and there are apprehensions that state governments may divert subsidised sugar, which explains the current line of thinking, sources said.

At present, the scheme has a target of 40 crore beneficiaries of BPL (below poverty line) families. About 2.7 million tonnes of sugar per annum are required for PDS sale.

According to the existing scheme, states purchase sugar to be supplied through the public distribution system (PDS), popularly known as ration shops, from the open market at wholesale rates and sell at a subsidised rate of Rs 13.50 per kg. The states get subsidy at Rs 18.50 per kg from the central government.

According to sources, there are indications from the finance ministry that the existing sugar subsidy scheme could be discontinued from the next fiscal.

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Sebi wishlist for Budget 2017: Here are the key points

Ahead of Union Budget 2017, the capital market regulator Securities and Exchange Board of India (Sebi) has sent its list of recommendations to the Finance Ministry. Sebi has asked the government to encourage stock trading and investments in mutual funds by easing tax rules. 

The regulator has also recommended lowering the securities transaction tax (STT) for tax trading and a slew of other measures, a report published in Economics Times said. 

Lower STT for trading 

After its introduction in 2004, STT was fully deductible against the income tax payable. But, after four years, an amendment was made to allow STT as a deductible business expenditure and the rebate under section 88E was also withdrawn. 

Now, Sebi has recommended lowering the STT for tax trading. 

Increase limit for tax-saving equity mutual fund 

For relief under Section 88E, Sebi has recommended an increase in the investment limit for tax-saving equity mutual fund schemes from Rs 1.5 lakh to Rs 2 lakh. 

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Railways' 'Mission 41K' to save energy worth Rs 41,000 cr

Union Railway Minister Suresh Prabhu today unveiled 'Mission 41K' to save Rs 41,000 crore on the Indian Railways' expenditure on energy consumption over the next 10 years.

This target will be achieved by taking a slew of measures which include moving 90 per cent of traffic to electric traction over diesel. Presently, this is at 50 per cent of the total rail traffic.The ministry plans to achieve this target by doubling the current pace of electrification, Railway Board Chairman A K Mittal said in an official statement.

The railways also aim to procure more and more electricity at cheaper rates through open market instead of sourcing it through DISCOMs and thereby hopes to save as much as 25 per cent on its energy expenses.

In the last Budget  2017 the railways have already set a target of generating 1000 MW of solar power and 200 MW of wind energy. 

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