India’s net direct tax collections till October 8 in the financial year 2022-23 have risen to ₹7.45 lakh crore

• Gross collections reach ₹8.98 lakh crore; tax refunds jump 81% over the preceding year to touch ₹1.53 lakh crore
• India’s net direct tax collections till October 8 in the financial year 202223 have risen to ₹7.45 lakh crore, more than half of the Budget targets
• It is an increase of 16.3% over the tax inflows during the corresponding period a year ago.
• Based on provisional data, net personal income tax collections grew 17.35%, rising faster than corporate income tax collections that were up 16.29% net of refunds.
• Securities Transaction Tax (STT) collections combined with personal income tax receipts, grew at a more moderate 16.25%.
• Underlining that direct tax collections continue to register a steady growth, the Ministry said tax refunds had jumped 81% over the preceding year to touch ₹53 lakh crore.

Gross collections

• Gross direct tax collections reached ₹8.98 lakh crore, 23.8% more than in the corresponding period of 202122.
• After adjusting for refunds, net direct tax revenues now constitute 52.46% of the total Budget Estimates.
• Net direct tax collections had crossed ₹7 lakh crore and were 23.3% higher at the time, so there appears to have been a moderation in tax inflows in the intervening three weeks.
• Gross revenues from direct taxes were at ₹8,36,225 crore on September 17, reflecting a 2% growth.

Classification of Taxes

Broadly taxes are divided into two categories:

1. Direct Taxes
2. Indirect Taxes

Direct Taxes

A direct tax can be defined as a tax that is paid directly by an individual or organization to the imposing entity (generally government). A direct tax cannot be shifted to another individual or entity. The individual or organization upon which the tax is levied is responsible for the fulfillment of the tax payment.

The Central Board of Direct Taxes deals with matters related to levying and collecting Direct Taxes and formulation of various policies related to direct taxes.

A taxpayer pays a direct tax to a government for different purposes, including real property tax, personal property tax, income tax or taxes on assets, FBT, Gift Tax, Capital Gains Tax, etc.

Indirect Taxes

The term indirect tax has more than one meaning. In the colloquial sense, an indirect tax such as sales tax, a specific tax, value-added tax (VAT), or goods and services tax (GST) is a tax collected by an intermediary (such as a retail store) from the person who bears the ultimate economic burden of the tax (such as the consumer).

The intermediary later files a tax return and forwards the tax proceeds to the government with the return. In this sense, the term indirect tax is contrasted with a direct tax which is collected directly by the government from the persons (legal or natural) on which it is imposed.

Some of the important Direct taxes:-

Fringe Benefit Tax

To reduce the profit on booked entry, many companies started providing various benefits to their employees and maintain them under their input cost. Thus reducing the profit which in turn leads to less taxation by the government.

Therefore government-imposed Fringe Benefits Tax (FBT) which is fundamentally a tax that an employer has to pay instead of the benefits that are given to his/her employees. It was an attempt to comprehensively levy a tax on those benefits, which evaded the tax.

The list of benefits encompassed a wide range of privileges, services, facilities, or amenities which were directly or indirectly given by an employer to current or former employees, be it something simple like telephone reimbursements, free or concessional tickets, or even contributions by the employer to a superannuation fund.

FBT was introduced as a part of the Finance Bill of 2005 and was set at 30% of the cost of the benefits given by the company. This tax needed to be paid by the employer in addition to the income tax, irrespective of whether the company had an income-tax liability or not.

The fringe benefits tax was abolished in the 2009 Union budget of India.

 Minimum Alternate Tax

The concept of Minimum Alternate Tax (MAT) was introduced in the direct tax system to make sure that companies having large profits and declaring substantial dividends to shareholders but who were not contributing to the Government by way of corporate tax, by taking advantage of the various incentives and exemptions provided in the Income-tax Act, pay a fixed percentage of book profit as minimum alternate tax.

As per the Income Tax Act, if a company’s taxable income is less than a certain percentage of the booked profits, then by default, that much of the book profits will be considered as taxable income and tax has to be paid on that.

It is called MAT and is a direct tax. It was introduced to deter some companies who managed their account in such a way that they end up paying zero or no tax to the government.

The current rate of MAT is 18.5%.

 Alternate Minimum Tax

Under the existing provisions of the Income-tax Act, Minimum Alternate Tax (MAT) and Alternate Minimum Tax (AMT) are levied on companies and limited liability partnerships (LLPs) respectively.

That means what is MAT to the companies, AMT is to the LLPs. However, no such tax is levied on the other form of business organizations such as partnership firms, sole proprietorship, an association of persons, etc.

To widen the tax base vis-à-vis profit linked deductions, it is proposed to amend provisions regarding AMT contained in the Income-tax Act to provide that a person other than a company, who has claimed deduction under any section (other than section 80P), shall be liable to pay AMT.

Under the proposed amendments, where the regular income-tax payable for a previous year by a person (other than a company) is less than the alternate minimum tax payable for such previous year, the adjusted total income shall be deemed to be the total income of such person and he shall be liable to pay income-tax on such total income at the rate of eighteen and one-half percent.

Indirect Taxes in India

Indirect taxes in India can be broadly classified into:

• Production of goods: Excise or CenVAT
• Distribution of goods: Sales Tax
• Production and Distribution of services (because they can’t be separated):
• Service Tax

In India, generally, taxes on production or manufacturing (Excise) is levied by the centre, and taxes on sales (Sales Tax) is levied by the states.

 Excise duties

Excise duty (Central VAT) is a tax on the manufacture of goods within the country. Excise duties are levied under the Central Excise and Salt Act, 1944, the Excise Tariff Act, 1985, and the Modified Value Added Tax (MODVAT) scheme or CENVAT.

The rates of excise duty levied vary depending inter alia on the nature of the item manufactured, the nature of the manufacturing concern, and the place of ultimate sale.

The duty rates are either ad valorem (i.e. a fixed percentage of the cost of production), specified (a fixed rate depending on the nature of the manufactured item, for example, length of product or count of product), or a combination of both.

The MODVAT scheme, introduced in 1986, on the recommendation of the L K Jha Committee, applies to certain specific items.

The objective of this scheme is to limit the cascading effect of duty incidence on several goods subject to excise which are further used as inputs for other excisable goods.

Under the scheme, MODVAT credit can be claimed on the purchase of raw materials on which excise has been paid.

This MODVAT credit can be used to set off excise duty payable on subsequent manufacture of goods.

Sales tax

Sales tax is levied on the sale of a commodity that is produced or imported and sold for the first time.

If the product is sold subsequently without being processed further, it is exempt from sales tax. Sales tax is levied by either the Central or the State Government, Central Sales tax, or 4% is generally levied on all inter-State sales.

State sales taxes that apply to sales made within a State have rates that range from 4 to 15%. However, exports and services are exempt from sales tax.

 

Service tax

Service tax is a part of Central Excise in India. It is a tax levied on services provided in India, except the State of Jammu and Kashmir.

The responsibility of collecting the tax lies with the Central Board of Excise and Customs (CBEC).

 

 

Indian Navy to join Malabar exercise

• Japan will host the 2022 edition of the Malabar naval exercise
• This consisting of India, Australia, Japan and the U.S.
• Exercise will held on the second week of November
• The exercise is scheduled to be held from November 8 to 18,
• The Indian Navy will also participate in the International Fleet Review (IFR) being hosted in the first week of November to commemorate the 70th anniversary of the Japanese Maritime Self Defence Force (JMSDF)
• The India U.S. bilateral Army exercise ‘Yudh Abhyas’ is scheduled to take place in the high altitude areas of Uttarakhand, around 100 km (aerial distance) from the Line of Actual Control.
• India is currently hosting the multilateral anti terror exercise ‘Manesar Anti terror 2022’ under the ambit of the Shanghai Cooperation Organisation (SCO) Regional Anti Terrorism Structure scheduled from October 8 to 13

 

North Korea fires more missiles, seventh launch in two weeks

• North Korea fired two ballistic missiles into the sea early on Sunday,
• South Korea said, the seventh such launch in two weeks, just hours after a U.S. carrier concluded joint drills off the Korean peninsula

 

Location of North Korea

• Destination North Korea, a country in eastern Asia that occupies the northern part of the Korean peninsula which is located south of mainland China, between the Sea of Japan (East Sea) in the east, Korea Bay and Yellow Sea in west.
• Capital is Pyongyang

 

Gambia police begin investigation into cough syrup deaths

• Police in the Gambia on Saturday announced they were launching an investigation into the deaths of dozens of children, amid growing concern over imported medicines..
• Following the deaths of 66 children, most from acute kidney failure
• The products – Promethazine Oral Solution, Kofexmalin Baby Cough Syrup, Makoff Baby Cough Syrup and Magrip N Cold Syrup – were manufactured by an Indian company, Maiden Pharmaceuticals, which had failed to provide guarantees about their safety
• The World Health Organization (WHO) issued a global alert over the four cough syrups – warning they could be linked to acute kidney injuries and the children’s deaths
• India is investigating cough syrups made by a local pharmaceutical company after the World Health Organization said they could be responsible for the deaths.

 

Location of Gambia

• The Gambia, country in western Africa situated on the Atlantic coast and surrounded by the neighbouring country of Senegal.
• It occupies a long narrow strip of land that surrounds the Gambia River
• Banjul is the Gambian capital

 

Modehra Village, Gujarat has been declared as India’s 1st solar-powered village

5th Assembly of International Solar Alliance take place in New Delhi from 17th-20th October 2022

 About International Solar Alliance (ISA)

• ISA is an action-oriented, member-driven, collaborative platform for increased deployment of solar energy technologies.
  • Its basic motive is to facilitate energy access, ensure energy security, and drive energy transition in its member countries.
• The ISA was conceived as a joint effort by India and France to mobilize efforts against climate change  through deployment of solar energy solutions.

• Vision:
  • Let us together make the sun brighter.
• Mission:
  • Every home, no matter how far away, will have a light at home.
• Headquarters:
  • The Headquarters is in India with its Interim Secretariat being set up in
• Member Nations:
  • A total of 106 countries have signed the ISA Framework Agreement.
  • Out of 106 nations, 86 have signed and ratified the ISA Framework Agreement.
  • All member states of the United Nations are eligible to join the ISA.
• Observer Status to International Solar Alliance:
  • The United Nations General Assembly (UNGA) has granted Observer Status to the International Solar Alliance (ISA).
  • It will help provide for regular and well-defined cooperationbetween the Alliance and the United Nations that would benefit global energy growth and development.

Objectives of ISA

 The ISA seeks to develop and deploy cost-effective and transformational solar energy solutions.

• To help member countries developlow-carbon growth trajectories, with particular focus on delivering impact in countries categorized as Least Developed Countries (LDCs) and the Small Island Developing States (SIDS).

4 – Priority Areas of the Program

• These priority areas are basically intended to create a favorable environment for solar energy investments to take root in the country.
  • Analytics & Advocacy
  • Capacity Building
  • Programmatic Support
  • Readiness and enabling activities

 

PM Modi be inaugurating Mahakal Lok in Ujjain on 11 October

Arjun Ram Meghwal will represent the Indian delegation at UNESCO-MONDIACULT 2022 in Mexico

10 October observed as World Mental Health Day observed

India wins second ODI against South Africa

• India Win by 7 Wickets
• India overhaul the target of 279 to finish with 282/3 in 45.5 Overs and beat South Africa by seven wickets in the 2nd ODI.
• Shreyas Iyer (113*), Ishan Kishan (93) top scorers in India’s big win