Finance Bill 2023 was approved with amendments. Here are the highlights

The Hindu live updates on the finance bill 2023 amendments

The Finance Bill 2023 was been passed in Lok Sabha without a discussion and the House was adjourned to meet again on March 27.

Moving amendments to the Finance Bill, Nirmala Sitharaman said, “It has been represented that payments for foreign tours through credit cards are not being captured under the Liberalised Remittance Scheme (LRS) & they escape tax collection at source. The Reserve Bank of India is being requested to look into this with a view to bring credit card payments for foreign tours within the ambit of LRS and tax collection at source thereon.”

The withholding tax rate on royalties and fee for technical services paid to non-residents has been raised from 10% to 20%. “This may increase the cost of import of technology in cases where Indian companies are grossing up withholding taxes and any bilateral tax treaty benefits are not available,” said Gouri Puri, partner at Shardul Amarchand Mangaldas & Co.

The Finance Bill has paved the way for setting up GST Appellate Tribunals across the country, with a principal bench in New Delhi and several State benches. The Tribunal will be headed by a former Supreme Court judge or a retired Chief Justice of a High Court. 

Also read: GST appellate tribunal may be headed by a former Supreme Court judge

The measure will have the intended effect of curbing excessive F&O trades only in flat or range-bound markets as when markets are volatile, traders will hope to offset the higher tax by higher payoffs, Mr. Jasani explained. “In the past, such raising of taxes had a temporary minimal impact of F&O volumes. For more effective curbs on volumes, SEBI or stock exchanges may have to link the volumes and Open interest in the futures and options market with the disclosed income or wealth of the participants,” the HDFC Securities official said.

“While the proposed increase in STT will shore up revenues of the Govt to a certain extent, the main idea behind this could be to discourage the excessive trade in F&O segment where a large number of retail traders end up losing money as per a recent SEBI study,” Deepak Jasani, head of retail research at HDFC Securities told The Hindu. “An incidental effect of this could be shifting the F&O trades to SGX, Gift and other locations that do not attract such taxes for participants who have access to them,” he added.