• Lok Sabha has cleared changes in Finance Bill 2023 to pave the way for setting up of an appellate tribunal for resolution of disputes under GST (Goods and Services Tax).
• On hold since GST launch in 2017, GSTAT will hear appeals against orders passed by Appellate Authority or Revisional Authority.
• GSTAT benches would be set up in every state with two judicial members and two technical members representing centre and state.
• GSTAT principal bench will be in Delhi with President, a judicial member and two technical members representing centre and state.
• Significance of GSTAT:
  • Lessen burden on higher judiciary and make GST regime more efficient.
  • Currently, high courts hear disputes in absence of GSTAT, making it expensive and time consuming.

Other key amendments in Finance Bill 2023

• Investments in mutual fund where not more than 35% is invested in equity shares of Indian company, i.e. debt funds, will now be deemed to be short-term capital gains.
• Set up a committee under Finance Secretary on pension system to address employees’ needs and maintain fiscal prudence.
• RBI is being requested to bring credit card payments for foreign tours within ambit of Liberalised Remittance Scheme (LRS) and tax collection at source theron.
• Enhanced tax benefits to offshore banking units operating in GIFT city, offshore banking units to get a 100% deduction on income for 10 years.
• Tax on royalty or technical fees earned by foreign (non-resident) companies hiked from 10% to 20%.

 

Economic terms

• Capital Gains Tax is the tax paid on any profit or gain that arises from the sale of a ‘capital asset
  • Short-Term Capital Gains Tax (STCG) These are the profits that individuals earn when they sell off their capital assets before one year of holding those.
  • Long-Term Capital Gains Tax (LTCG) These are the profits that individuals earn when they sell off their capital assets post one year.