Nirmala Sitharaman tweaks tax provisions for EPF contributions, says ready to discuss GST on fuel if States want it
EPF cap raised to тВ╣5 lakh if there is no contribution by the employer.
The Centre is ready to consider bringing fuel under the Goods and Services Tax regime if the States bring up the issue at the GST Council, Finance Minister Nirmala Sitharaman said on Tuesday, arguing that all decisions related to the indirect tax are driven by the Council and not the Ministry of Finance.
The Minister introduced 127 amendments to the Finance Bill, 2021, which was passed by the Lok Sabha. These included an income tax break for the proposed development finance institution to fund infrastructure and a tweak in the proposed tax provisions for employeesтАЩ provident fund (EPF) contributions.
Defending the decision to impose an Agriculture Infrastructure Development Fund Cess on several items including fuel in the Budget, Ms. Sitharaman said that the proceeds from the collections would be shared with the States as they were the ones in charge of farm infrastructure such as APMCs and marketing yards.
тАЬThe cess may not get devolved to States, but eventually it will be used for improving infrastructure in agriculture and the farm yards and the marketing yards, which are with the State governments and so the funds will have to go the States only,тАЭ the FM said.
The Minister also sought to assuage StatesтАЩ concerns about a possible reduction in fund allocations owing to the Finance CommissionтАЩs recommendation to set up a non-lapsable Defence and Internal Security Modernisation Fund. тАЬIn principle, we have agreed to it. [But] the fear that it will be imposed on States is not well-founded at all. We have not yet taken a decision on this,тАЭ she said.
тАЬIn the Finance Bill, a few new proposals are being added of a minor nature,тАЭ the minister said.
EPF Tax
The government has also introduced an amendment in the Budget proposal to tax income on employee contributions of more than тВ╣2.5 lakh a year into Provident Fund accounts.
тАЬThere is 1% of people who were going up to тВ╣5 crore contribution also. The тВ╣2.5 lakh [cap] covers 92%-93% of people,тАЭ the FM said. тАЬTherefore, I donтАЩt think this is going to affect most people for whom tax-free, assured income is provided under the scheme,тАЭ she added. тАЬThrough an amendment, I intend to raise this limit to тВ╣5 lakh in those cases, and only in those cases where there is no contribution by the employer in the EPF account,тАЭ Ms. Sitharaman said.
Taxing fuel
Responding to many MPsтАЩ concerns about the high taxes on petrol and diesel and suggestions to bring them under the GST regime, Ms. Sitharaman said that both the Centre and States were taxing fuel and the CentreтАЩs taxes had to be shared with the States.
тАЬAnd if there is this concern, rightly, a concern about the fuel taxes. I would honestly think, many of the States would be watching this, and in the next GST Council, if that discussion comes up, I will be glad to have it on the agenda and discuss it. Let the States come and discuss it,тАЭ the minister said.
тАЬIssues related to GST, being posed to Finance Minister, are not Finance Ministry matters,тАЭ she said. тАЬThey are GST Council matters in which all States are members. ItтАЩs a collective decision and without their clearance, things canтАЩt happen,тАЭ Ms. Sitharaman pointed out.
Aadhaar intimation
Permanent Account Number (PAN) card holders failing to intimate their Aadhaar numbers to the Income Tax department on, or before a prescribed date, shall be liable to pay an Aadhaar intimation default fee of up to тВ╣1,000, as per amendments made to the Finance Bill.
