Notwithstanding economic uncertainties worldwide and global glooms, India has emerged as a key driver of global growth with an underlying emphasis on improving the ease of doing business.
With moot impression to strengthen tax compliance process and ease the compliance burden, budget speech penned down contemporary reforms and policies under GST law to fulfil the long-cherished dream of Prime Minister christened as ‘one nation- one tax- one market’.
Aligning with various clarifications provided over the years by GST council, this year’s budget has further clarified the scope of “Non-taxable online recipient” by including all unregistered persons receiving Online Information Database Access and Retrieval services (OIDAR) services, whether or not for business or commerce. Further, scope of OIDAR has been widened by omitting the requirement of automation and human intervention.
Amongst the slew of proposals, it has now been clarified that input tax credit shall not be available on expenses incurred on corporate social responsibility mandated by the Companies Act. Said amendment has added to the already pressing matter in interpreting scope of furtherance of business and resultant credit eligibility for varied expenses such as IPO expenses, Covid-19 related expenses, employee expenses, etc.
In line with idea of continued stability in indirect taxes and building a vital ecosystem of optimum regulation incepted in last few budgets, honorable minister duly recognized the need for ever evolving technology solutions and cutting edge artificial intelligence to pull off PM Modi’s vision of ‘Digital India’ and ‘Ease of Doing business’.
Coining the outlook of “Make AI in India and Make AI work for India” at the heart of digital revolution, this budget may galvanize an effective AI ecosystem necessary to nurture buoyancy in GST revenues and improve taxpayer morale and trust in the system.
Upholding the bullish traction for India Inc, it is now to be seen how the general budget would fuel the economic mileage and generate dividends of prosperity thereby acting as a yardstick in determining the effectiveness of government’s policy reforms.
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Krishan Arora is a Partner and Indirect tax expertise leader at Grant Thornton Bharat LLP. Karan Kakkar is a Partner with Grant Thornton Bharat LLP.
Contributions by: Devika Dixit (Director), Pragya Sharma (Associate Director) and Vasu Aggarwal (Assistant Manager) at Grant Thornton Bharat LLP
Views are their own.
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