Millennium Post

I-T Dept to put booming E-commerce biz on radar

The Income Tax department fo India has trained its scanner on the burgeoning ‘e-commerce’ business in the country with the taxman deciding to monitor a host of services conducted by these popular online portals to better fill up the revenue kitty. After making an official assessment report on the online retail business in India, the department has decided to track these “huge business” conducting services for extracting the special category of Tax Deducted on Source (TDS) which is taken from the payment made by firms and organisations for getting special services done on the internet retail space.

A “strategy action plan” formulated by the CBDT, the apex policy making body of the I-T department, for bolstering revenue collection in the current fiscal, has asked taxman to pay special attention to this area of business. The action plan prepared for 2015-16, also accessed by PTI, states that advertisements on different websites of various organised and unorganised agencies, payments for jobs like creating a website, translation of pages, data entry of text, research, among others are areas which can yield “significant revenue” under the TDS category. 

“The e-retail or e-commerce business is a fairly new avenue from the <g data-gr-id="23">view point</g> of collecting taxes and the sector is witnessing huge money changing hands. The department has prepared some trends in this regard and it has been decided to seriously tap this popular online sector for better TDS collections,” a senior I-T official said.

“A lot of people now purchase their daily goods or choice items through popular online retailers. A number of entities involved in the operations of these web portals are beyond the tax radar and as part of CBDT’s initiative to widen the tax base, this sector is important to be tapped,” the official said. As per industry estimates, e-commerce business in India was about $6 billion in value in 2012 and is expected to reach $76 billion by 2021. The Economic Survey prepared by the Finance Ministry of India in 2014-15 had said that the e-commerce sector in the country is likely to witness a growth of over 50 <g data-gr-id="37">per cent</g> in the next five years. The I-T department has particularly been bolstered by ever-increasing collections under the TDS head as it believes that collecting taxes this way promotes a “non-adversarial” regime and according to latest data of the Finance Ministry, TDS now contributes 36.08 per cent of the total direct taxes collection.

The official said that the tax department has developed required “technical platforms” to track business activities on popular e-retail websites operating in the country. The Central Board of Direct Taxes has also decided and instructed the I-T offices to monitor “catering contracts of 5-star hotels” and “sub-contractors” working with large and small infrastructure companies for tax collection under TDS. Under the new service sectors, which will be monitored by the taxman this fiscal, the action plan has called for including payments made by educational institutes to guest faculty including others. 

CBEC gets five new members, will now function at full strength
 The Central Board of Excise and Customs (CBEC), the apex body for indirect tax policy making, is in its full strength now as the government has appointed five new members. Former Director General, Directorate of Revenue Intelligence (DRI) Najib Shah, his wife Neerja Shah, who is working as Director General in Directorate General of Human Resources Development, and Vanaja Narayan Sarna, Chief Commissioner, Tax Arrears Recovery, have been appointed as new members in the CBEC, a Finance Ministry order said. 

Besides them, Ashok K Kaushal and V S Krishnan, who are working as Chief Commissioners, have also been appointed as members in the CBEC, it said. Najib, Neerja, Kaushal and Krishnan are 1979 batch Indian Revenue Service (Customs and Central Excise) officials. Whereas, Sarna belongs to 1980 batch. The CBEC consists of a chairperson and maximum of six members. 

At present, Kaushal Srivastava is working as CBEC chairperson and Joy Kumari Chander, as lone member. Srivastava is due to retire in June and Chander will demit her office this month end. Earlier, in March, Shashi Bhushan Singh, a former member of CBEC, was appointed as adviser in the board for three months on <g data-gr-id="69">contractual</g> basis. Singh, who retired in February this year, will complete his contractual term this month-end. With the appointments of the new members, the CBEC is expected to get a boost in its effort to collect indirect tax revenue comprising of service tax, excise and customs duties. The CBEC has surpassed its indirect tax collection target by a handsome margin of Rs 4,000 crore to reach Rs 5.46-lakh crore in the 2014-15 fiscal. 
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