UPSC Current Affairs Quiz, 28th Feb 2023

Explanation:
It was introduced in India with the intention of taxing the digital transactions i.e. the income accruing to foreign e-commerce companies from India.It is aimed at taxing (B2B) business to business transactions.It is levied at 6% on payments made to offshore platforms hosting online advertisements, it will be taxed only at 2% on e-commerce transactions.
Equalisation Levy 2.0:
The Equalisation Levy introduced by the Finance Act 2016, was charged at 6% on certain online advertising and related services.

Explanation:
Countervailing duty is levied on the imported goods to counterbalance (Countervail) the subsidies provided by the exporting country’s Government. Many of the governments provide subsides either during production or during exports to create price advantage for their products, this can be harmful to the products of the importing country, so Countervailing duties are levied to equalize the advantage.Anti-dumping Duties are levied on the goods that are either sold either, below the cost of production or below the prices in the home country. This is considered predatory as it tries to drive-out the products of importing country and create a monopoly. To prevent this from happening, anti-dumping duty is levied.

Explanation:
Office of the United States Trade Representative (USTR) has said that the Digital services taxes adopted by India, Italy and Turkey discriminate against US companies and are inconsistent with international tax principles. Hence, statement 1 is not correct.Digital Services Taxes (DSTs) are the adopted taxes on revenues that certain companies generate from providing certain digital services. E.g. digital multinationals like Google, Amazon and Apple etc.The government had moved an amendment in the Finance Bill 2020-21 imposing a 2% digital service tax (DST) on trade and services by non-resident e-commerce operators with a turnover of over Rs. 2 crore. Hence, statement 2 is correct.

Explanation:
Since an overwhelming majority of Indians do not pay income taxes,Indian tax revenues remain largely dependent on indirect tax collections, which include all taxes on spending (such as GST). These indirect taxes account for over two-thirds of total tax revenue in India. Hence, statement 1 is not correct. Over half of the government’s expenditure in India goes towards subsidies and other programmes. India also spends a substantial amount on interest payments. At 2017 levels of expenditure, 6% of GDP went towards interest payments. Higher proportion of interest payments are a direct outcome of the debt levels accumulated by the Indian government. Hence, statement 2 is not correct.

Explanation:
The Finance Minister announced that a Taxpayer’s Charter shall be enshrined in the income-tax law. She proposed to amend the provisions of the Income-tax Act to mandate the Central Board of Direct Taxes (CBDT) to adopt a Taxpayers’ Charter. Hence statement 2 is not correct.
Accordingly, Taxpayers’ Charter was launched by Prime Minister Narendra Modi on August 13, 2020. It promises to maintain the privacy and confidentiality of income taxpayers and to reduce the cost of compliance with tax laws. The charter lists out the income tax department’s commitments to the income taxpayer as well as what the department expects from the taxpayers. According to PMO twitter handle, the Taxpayers’ Charter has come into effect from August 13, 2020.
The Taxpayer Charter explains what a taxpayer can expect from tax authorities and what is expected from a taxpayer. The aim of the Charter is that of nurturing the relationship between the Revenue departments and the community that they serve, a relationship of mutual trust and respect. Hence statement 1 is correct.
The charter is the result of an initiative first mentioned in the Budget Speech for 2010 and has evolved into its present form following consultation with involved stakeholders.
A taxpayer has the right: o to be treated with fairness and impartiality
to be treated as honest and tax compliant unless there is evidence to the contrary for certainty o for assistance and information from the Tax Departments to pay no more than the correct amount of tax not to be subject to retrospective taxation to minimise compliance costs to be advised and represented by any person on taxation matters o to appeal to privacy and confidentiality of information, authorities hold about a taxpayer to know what information authorities hold about taxpayer for the licit arrangement of your tax affairs that minimise the tax liability to request a payment plan to complain about service, behaviour and actions
In return, a taxpayer is expected
to be honest to be compliant, and cooperate when you deal with the Tax Departments to keep proper records in accordance with the law to file proper and complete tax documents and effect payments by the statutory due dates to inform the Tax Departments about changes in circumstances to know tax responsibilities and the consequences for noncompliance