30% tax on Bitcoin virtual digital assets (VDAs)

[Economy WMD] 30% Tax on Bitcoin & VDA, BNPL, WTO’s Agreement on Fisheries Subsidies (AFS), & More Weekly Mrunal Digest from Jun week2-2022

In Economy by Mrunal

Banking Finance

  • EcoPill1B1-classification of Bank/NBFC: buy now pay later (BNPL) (1) BNPL: suppose fridge worth ₹ 25,000: Customer pays ₹2,788 x 9m months instalment (No interest). (2) credit cards ke equated monthly instalments (EMI): which may carry a high interest rate ₹2,965 x 9mnoths including ₹1,594 (15%) = ₹26,684. SAMPLE https://www.amazon.in/LG-Inverter-Frost-Free-Refrigerator-GL-I292RPZX . But then how does BNPL company make profit? Ans. BNPL company will pay the merchant immediately at lower price e.g. 24000. But why would seller agree for this? If seller’s cost price is may be 20,000 then he’s still in profit. BNPL Company is not putting Gun over the head of seller.
  • 😥 Concerns? People without good financial history getting lured into buying they cannot afford / some other financial scam → so RBI thinking of tightening the rules over BNPL, pre-paid instruments (PPIs), digital lending apps (DLAs)
  • (How are these three things different from each other? Not important). Examples of buy now pay later (BNPL) companies e.g. BNPL companies are LazyPay, Simpl, ZestMoney, Amazon Pay Later, Ola Money Postpaid, Paytm Postpaid, Flexmoney, Slice, UNI and EPayLater. (अभी ख़रीदो, बाद में भुगतान करो इस प्रकार की कम्पनियों पर रिज़र्व बैंक थोड़ी और सख़्ती बढ़ा रहा है।)

Budget Taxation:

30% tax on Bitcoin virtual digital assets (VDAs)

  • EcoPill2-Budget Taxation: Finance Act, 2022: 30% tax on Profit on cryptocurrency trade. And, tax deducted at source (TDS) of 1 per cent on transfer of virtual digital assets (VDAs) from July 1, if the value of transactions exceeds Rs 10,000 in a year. Nodal? Central Board of Direct Taxes (CBDT) Additionally, the CBDT has defined four primary VDAs — bitcoin, ether, USD Tether and USD Coin. How these 4 primary VDS will be used for calculation? ANS. NOT IMP. (क्रिप्टोमुद्राओं की लेनदेन व्यापार पर एक% TDS लगेगा उसके व्यावहारिक जीवन के नियमों को जारी किया गया की यदि वार्षिक लेनदेन का कुल मूल्य १०,००० से अधिक होगा तो टीडीएस कटेगा)
  • EcoPill2-Budget Taxation: Fiscal prudence/austerity measures- FinMin’s Expenditure Department said it is not advisable to continue Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY- free ration to poor people) beyond its present extension (till September) on “food security (FCI godowns will get empty) and fiscal grounds (Govt funds will get empty)”. (खाद्य सुरक्षा और सरकारी वित्तीय संसाधनों के संरक्षण को देखते हुए गरीबों को मुफ़्त पाँच किलो अनाज देने की जो प्रधानमंत्री ग़रीब कल्याण अन्न योजना चल रही है उसे सप्तेम्बर माह के बाद बंद कर देना चाहिए ऐसा वित् मंत्रालय का कहना है- वरना फ़ूड कॉर्पोरेशन ऑफ़ इंडिया के अनाज-गोदाम और सरकारी तिजोरी ख़ाली हो जाएगी)
  • EcoPill2-Budget Taxation: Fiscal prudence/austerity- FINANCE Ministry has asked government employees to opt for ‘cheapest fare available’ while travelling. FinMinistry is looking to cut down on expenditure because govt expenditure on food-fertiliser subsidies increased, whereas tax income from excise duty cuts on petrol and diesel decreased. (वित् मंत्रालय ने सरकारी कर्मियों को कहा है कि सरकारी काम पर सफ़र के दौरान सबसे सस्ती टिकट ख़रीदे, एसी मित-व्ययता ज़रूरी है क्योंकि सरकार पर सब्सिडी का बोझ बढ़ रहा है और टैक्स की आमदनी कम हो रही है)

WTO’s Agreement on Fisheries Subsidies (AFS):

  • EcoPill3B-Intl-Orgs: WTO’s Agreement on Fisheries Subsidies (AFS): AFS prohibits three kinds of subsidies:
  • (1) illegal, unreported, or unregulated (IUU) fishing
  • (2) fishing of already over-exploited stocks (3) fishing on unregulated high seas. However, India wants special and differential treatment (S&DT).
  • 🤔India wants transition period for phasing out subsidies type#1 and type2 within their Exclusive Economic Zone (EEZ).
  • 🤔 Foreign countries contribute to overcapacity and over-fishing (OCOF). India wants stricter action on them.
  • 🤔 Blue economy — sustainable use of ocean resources for economic growth.
  • 🤔India has set a target of exporting marine products worth $14 billion by 2025.
  • Size of Fisheries subsidies
  • 1) India $277 million in 2018
  • (2) Whereas China, EU, US, South Korea, and Japan, whose subsidies range from $7,261-$2,860 million respectively.
  • Sustainable Development Goal (SDG) 14.6 is to address harmful fisheries subsidies provided by countries towards marine fishing and to save the it world’s fish stocks from further depletion. So we need to fix this. (विश्व व्यापार संगठन का मत्स्योद्योग सब्सिडी पर समझौता जिसमें तीन क़िस्म की सब्सिडी पर प्रतिबंध लगाने की बात है ताकि समंदर में मछलियों के विनाश को रोका जा सके और अंतरराष्ट्रीय व्यापार बाधाओं को कम किया जा सके। हालाँकि भारत चाहता है कि हमें थोड़ी अलग रियायतें दी जाए। पर सब्सिडी में कमी करने की समयावधि को लंबा किया जाए। वर्तमान समय में जिनीवा में हुई मंत्रिपरिषद में इस पर कोई मज़बूत निर्णय नहीं लिया जा पाया। )
  • EcoPill3B-Intl-Orgs: G7 summit at Schloss Elmau in southern Germany. Modi is visiting. (जर्मनी में हो रहे जी सेवन सम्मेलन में मोदी जा रहे हैं)
  • To download the PDF compilation of current affairs– Visit Mrunal.org/current