If the referring court were to reach the conclusion that the taxable person concerned knew or should have known that the transaction which it had carried out was part of a tax fraud committed by the purchaser and that the taxable person had not taken every step which could reasonably be asked of it to prevent that fraud from being committed, there would be no entitlement to exemption from VAT. Admittedly, a VAT identification number provides proof of the tax status of the taxable person for the purposes of the application of VAT and facilitates the tax audit of intra-Community transactions.
However, given that the obligation to check the status of the taxable person must be discharged by the competent national authority before it assigns that person a VAT identification number, possible irregularities affecting the register cannot deprive a trader who has relied on the information entered in that register of the right of exemption from VAT to which it is entitled.
Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable. Skip to main content. This document is an excerpt from the EUR-Lex website. EU case-law Case-law Digital reports Directory of case-law.
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Language of the case Language. Document published in the digital reports. Multilingual display. Arabadjiev, Judges, Advocate General: J. Kokott, Registrar: K. The government promoted greater participation of citizens in the growth of industry. The primary objective was to raise the capacity for individual savings and to improve the performance of industry to receive high returns on the capital invested.
The budget also for the first time had provisions of aid to foreign countries, such as Nepal, Bhutan and African countries. Defence expenditure continually rose despite efforts to restrict its growing share. The Budget was considered to be a people-sensitive budget as it ended the requirement of stamping and assessment of goods by the Excise Department authorities.
The government also introduced the system of self-assessment by all manufacturers. Greater attention was paid to dry farming areas and small enterprises and entrepreneurs were encouraged. The budget for made provisions essentially through schemes that focussed on social welfare with future growth potential.
Institutional finance to assist industry and agriculture was also mobilised to create employment opportunities in the longer run. The other areas of focus were: rural and urban development, drinking water facilities and pension schemes. The budget also provided Rs 56 crore for the nationalisation of the general insurance companies, Indian Copper Corp and coal mines.
This was done to maintain uninterrupted supply of coal with the growing demand for coal in various industries like power, cement and steel at the time. It was also believed that the interest of mine workers would be best served in a government-run set-up.
The estimate for the budget deficit for was Rs crore. The budget allocations included provisions to supply good quality seeds of high-yielding varieties. Fertiliser production programmes were pushed. The programmes were designed for optimum utilisation of surface and groundwater. The nationalisation of coal began to yield results. The provision in the budget for food subsidy at Rs crore increased to Rs crore. Defence expenditure for the phase was Rs 2, crore, while non-plan revenue expenditure was estimated at Rs 5, crore.
The investment sector was given maximum attention in the budget for A provision of Rs crore was made in for health and family welfare as against only Rs crore in A provision of about Rs 50 crore was made for the landless and weaker sections as part of the point economic programme. A provision of Rs 70 crore was made for the development of tribal people and areas under the tribal sub-plan.
Outlay on agriculture and rural development was increased substantially. Industrial growth increased to 4. This allowed credit set-off of duty paid on raw materials against the duty on final products to reduce the cascading effect of taxes on the final price of goods. Budget provisioning in this phase also proposed the setting up of a small industries development bank, an accident insurance scheme for municipal sweepers and railway porters, bank loans with a subsidy for rickshaw pullers, cobblers and such self-employed people.
The government also announced its intention to dismantle the license raj. The enforcement directorate of the finance ministry was established with the mandate to sniff out tax evaders.
Provisions related to minimum corporate tax, better known today as MAT or Minimum Alternative Tax was also introduced to bring into the tax net highly profitable companies that were legally managing to avoid paying income tax. Import-export policy was revised and import duties were slashed to expose Indian industry to competition from abroad.
The government began rationalisation of duty structures by reducing the peak customs duty from per cent to per cent. This was done because the balance of payments was precarious.
The government introduced service tax in the budget and also placed bets on growth through rapid technological development. The budget made tax rates moderate for individuals as well as companies. It allowed companies to adjust MAT paid in earlier years against tax liability of subsequent years. It phased out ad-hoc treasury bills used for financing budget deficit.
Budget aimed to widen the tax base. India had a peak income tax rate in the late s and early s of The moderation in rates improved overall compliance as those who used to find rates prohibitive earlier began to pay up instead of hiding their incomes. Personal income tax collections increased from —from Rs 18, crore to Rs , crore during April January VDIS garnered about Rs 10, crore.
Higher disposable incomes in the hands of taxpayers helped generate demand. The incremental tax revenues were leveraged to increase public expenditure on social welfare and infrastructure. In Budget , income from software exports was made tax-free for three years, and then the tax holiday was extended to perpetuity in budget This was to improve the ratio of taxes to GDP and to promote India as a major software development centre in the world.
The introduction of this tax holiday to software export sector was followed by exceptional growth in Indian IT industry. Transfer pricing regulations was also introduced in , which required transactions between associated enterprises to be transparent and whole. The regulation played a big role in the prevention of erosion of the tax base in India. Economy showed remarkable resilience. Continued high food prices were a principal concern.
Consumers were denied the benefit of seasonal fall in prices despite improved availability of food items, revealing shortcomings in distribution and marketing systems.
Until now, the Ministry of Railways gets a gross budgetary support from the central government to maintain and expand its network, among other things.
The Railways would then pay a return on this investment known as "dividend". From this year, the railways will no longer need to pay such a dividend back to the central government. Previously, the government expenditure was classified in two ways: plan and non-plan expenditure and capital and revenue expenditure. The finance minister in his speech last year announced the merger of plan and non-plan expenditure. Various committees examining the subject have also recommended this change.
The classification of expenditure was related to the role of the erstwhile Planning Commission. The Planning Commission would make allocations for plan expenditure based on five-year plans targets, while the finance ministry would make allocations for non-plan expenditures.
With the last five-year plan 12th Five-Year Plan ending this year, this classification would no longer be relevant. Expenditure now will be classified only under capital and revenue heads. Below are quick explanations of budgetary terms that you will come across in a budget document:. Capital expenditure: It is the outflow of funds expenditure which creates assets or reduces liabilities. For instance, the building of roads, or repayment of loans would be categorised as capital expenditure.
Revenue expenditure: It includes all such expenditure that is not classified as capital expenditure. It brings about no change in assets or liabilities. Salaries, interest payments or other administrative costs are examples of revenue expenditure. The revenue and capital classification apply to government receipts as well. Revenue receipts: These are mostly revenues from taxes, dividends from companies owned by the government and interest payments on loans given by the government.
Capital receipts: These are mainly funds borrowed by the government from various sources in India and overseas and repayments by state governments of loans borrowed from the centre.
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