Revenue Secretary Sanjay Malhotra on Wednesday said the government may come out with a clarification on taxability of sedan type of vehicle in case any doubt is raised. In an interview to businessline, he also said that new Group of Ministers on Rate Rationalisation is to be reconstituted soon. Excerpts:
There is a concern that when one is making payment to foreign company providing online gaming platform, it will be difficult to identify ultimate beneficiary, which is foreign player in this case..
When money goes out, it has to be declared as for what purpose it is going under the RBI regulations. So, we will have to work with them to include this (online gaming). We will work out details. Challenges are there but it will be our effort that we provide a level playing field to the domestic industry as well.
Is it correct to say whosoever is the regulator in payment mechanism, will define the formal regulation?
The regulator for payments is RBI. The regulator for online digital content is MeitY (The Ministry of Electronics and Information Technology). Now, in case entities which are located abroad, but not following the law of the land while operating here, we can regulate them. In the worst case, we can even ban them. We can blacklist them. We can block them.
There are investigations by the Income Tax department as also by the GST department. There are some litigations too. What will be the impact of all these?
Recently, we lost in one case in the High Court of Karnataka and we are filing an SLP in the Supreme Court. What happens in that case will be determined by the Supreme Court, but we are sure that in future, it will not be subject to any interpretation. That’s our effort. Still if the courts or someone else interprets it some other way then we will fight it out.
And the investigation will continue whether by the IT Department or GST department...
Yes
Another issue is about definition of sedan vehicles. On Tuesday, GST Council came out with a clarification on utility vehicles, but some doubts still remain with regard to sedan.
Discussion was only about utility vehicles. Now the question that has been raised about sedan. The issue before us was not sedan versus utility vehicles. The issue was SUV and non-SUVs. We have said whether a utility vehicle is SUV, MUV or any UV, all are at par, We have not clarified the difference between sedan and SUV or a utility vehicle. If that question is brought out, we will provide that and that was not there on the table for the council. If there is a doubt, that will be examined and that will be provided.
What is happening on the issue of rate rationalisation? Has the council discussed about re-constitution of GoM?
There was no discussion in the Council meeting. This is not a Council subject. The Central government will now reconstitute the GoM because of changes in the Karnataka Ministers and some other States Ministers too. Very shortly, we will be issuing the reconstitution order and once that is issued, this is an ongoing process of rate rationalisation/inverted duty exemptions. Some work has been done some work is remaining. It will be an ongoing thing. So, once it is constituted, they will take up this work.
As we have entered into 7th year of GST, what are two-three things we can see in near term.
The agenda is basically twofold. One is to improve to ease of doing business and two improve the compliance. Both go hand in hand. The first, of course, gets priority over the second. These are the two primary ways by which we continue to work and achieve the revenue targets that have been given to us.