Fuel Price Cut Unlikely, Top Official Says Crude Prices Have "Softened"

There's no reason to lower excise duty on petroleum products, Revenue Secretary Sanjay Malhotra told NDTV today, explaining that it was already done twice when crude prices were at their peak. Crude prices have since softened, and there's no proposal for further reduction, he said.

On taxing online gaming, he said they haven't recieved any specific written proposal from the Ministry of Electronics and Information Technology.

"This was a well considered decision by GST and we have done this after lots of discussion. We have spoken and met  to the online gaming industry too," Mr Malhotra said about the Goods and Services Tax Council announcing it will levy a 28 per cent tax on online games involving real money.

"There is a lack of communication. We are not taxing recreational games. Where there is no money involved, taxes will remain at 18 per cent," he clarified.

Online gaming players have expressed disappointment with the decision of the Goods and Services Tax Council. The government may request the GST Council to consider the facts of new regulatory framework for the industry, Union minister Rajeev Chandrasekhar said last week, revealing that it took three years for the Council to reach a decision on online gaming.

Gamers have said that levying 28 per cent GST on Gross Gaming Revenue (GGR) or the platform fee results in around 1,000 per cent increase in tax on the industry and cause irreversible damage to the USD 2.5 billion investments in the Indian online gaming startup ecosystem.

Mr Malhotra said the gamers' concerns will be taken into account by the GST Council, and clarified that the 28 per cent taxation will not be on the GGR, but on "face value". Whether the tax will be at entry level or at every bet pool will soon be decided by the Council, Sanjay Malhotra said.

Mr Malhotra also put to rest speculations around whether the deadline for filing income tax returns will be extended, like every year. 

"There will be no extension. We are doing much better than last year, and I see no reason to delay or extend, and urge everyone to file their tax returns," he said.

Overseas ordinary purchases like an OTT subscription, news subscription etc are not under the Liberalised Remittance Scheme (LRS). "Only remittances made for the purpose of investments, education, tourism, medical expenses etc. are under LRS," he said, and pointed out that only spends over Rs 7 lakh are taxed. 

LRS, aimed to facilitate hassle-free foreign exchange, is a scheme that enables Indian residents to remit funds abroad for certain specified purposes. Any remittance over $2.5 lakh or its equivalent in a foreign currency will need the Reserve Bank of India's (RBI) approval, the earlier limit was $25,000. Earlier, the usage of international credit cards (ICCs) for making payments for fulfilling expenses during travel outside India was not included in the LRS limit but this too has changed as the government suspected tax evasion.

The Union Budget 2023-24 hiked TCS (tax deducted at source) rates to 20%, from 5% currently, on overseas tour packages and funds remitted under LRS (other than for education and medical purposes). The new tax rates came into effect from July 1, 2023.

This mostly affects high net worth people who spend huge sums in investments using their credit cards and those who buy very expensive gifts abroad.

Since "there was a flight", we taxed foreign remmitances at source at 20 per cent, and the credit card international spend is at 20 per cent, he said.

"Tax buoyancy is good, and we will meet our targets despite economic growth slowing down," the Revenue Secretary said.