On an overdrive to push Indians towards embracing digital transactions, will the Modi government introduce Digital Bharat Cess in Budget 2017 to bankroll its latest initiative? The answer could be yes, if the Swachh Bharat Cess (SBC) and the Krishi Kalyan Cess (KKC) are any indication.
In November 2015, the Modi government imposed SBC at the rate of 0.5 percent on all taxable services to fund its Clean India Mission across the country. The SBC collection during the financial year 2015-16 was Rs 3,901 crore.
"There shall be levied and collected in accordance with the provisions of this Chapter, a cess to be called the Swachh Bharat Cess, as service tax on all or any of the taxable services at the rate of two per cent. on the value of such services for the purposes of financing and promoting Swachh Bharat initiatives or for any other purpose relating thereto," according to an explanatory note issued by the CBEC.
In Budget 2016, Finance Minister Arun Jaitley announced another levy, the Krishi Kalyan Cess (KKC) effective from June 1, 2016 to fund initiatives towards improving the agriculture sector and the plight of farmers.
Last month, Niti Aayog, the government's think-tank, announced incentives comprising weekly and monthly lucky draws entailing an outgo of Rs 340 crore, to promote digital transactions amid the cash crunch. The incentives were aimed at both merchants and customers — Lucky Grahak Yojana and Digi-Dhan Vyapar Yojana.
"The focus of Lucky Grahak Yojana and Digi-Dhan Vyapar Yojana is on poor, middle class and small businesses so as to bring them into digital payments revolution," Niti Aayog CEO Amitabh Kant had said while explaining the rationale behind the schemes.
Meanwhile, the government has landed huge sums in undisclosed income and cash and jewellery seizures since demonetisation.
Between November 8, 2016 and January 5, 2017, defaulters have admitted to undisclosed income worth Rs 4,807 crore, while Rs 609.39 crore has been seized in cash and jewellery, according to an IANS report. New currency notes worth Rs 112 crore were part of the seizure and 5,184 notices have been issued to various entities, the report added, citing income tax sources.