For the fiscal year FY23, the total indirect taxes were estimated at Rs13.30 trillion but India is likely to end the year with collections of over Rs14 trillion. Overall, for direct and indirect taxes put together, the government is likely to exceed the revenue target by Rs4 trillion. Typically indirect taxes have 3 categories. Most of the indirect taxes of the past like service tax, excise duty, octroi and sales tax were subsumed into the Goods & Services Tax (GST).
Hence, the overall gamut of indirect taxes has become quite limited. It includes GST, excise duty on petrol, diesel and alcohol and some items of customs duty on imports. The GST itself is broken up into Central GST (CGST), State GST (SGST), Integrated GST (IGST) and Cess. It needs to be noted here that the role of the Union Budget in setting indirect tax rates has sharply come down. In the past, the budget used to have a comprehensive discussion on rate changes and its implications. Now, all the GST changes are under the purview of the monthly GST Council Meet and do not come into the Budget purview Here are some of the major indirect tax changes expected in Union Budget 2023-24.
Major indirect tax expectations for Budget 2023-24
As stated earlier, the indirect tax regime is a lot more stabilized and outside the purview of the union budget. Hence the expectations are more on the procedural front than on the policy front.
The US Federal committee's meeting will conclude on March 16, 2022.
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