A Comparison between Banking Transaction Tax (BTT) and Non-Cascading Transaction Tax (NCT)
What is Banking Transaction Tax (BTT)?
Banking Transaction Tax (BTT), is a taxation system, that is in Draft Proposal stage, is proposed to replace all existing Taxes and Duties of Central, State and Local Governments except Customs / Import Duties, by applying Tax on Credit Transactions, that happen into bank accounts and without any exemptions, to anyone.
The Collected Tax Revenue will be appropriately shared between all the Beneficiaries (i.e., Central, State & Local Governments, in addition to Banks, that facilitated the transaction), this is proposed as an alternative Taxation System in India, by Mr.Anil Bokil of Arthakranthi (back in Year 2004), that has the potential to root out black money, when adopted at major scale. The details of the Draft Proposal, can be found at,
http://www.arthakranti.org/proposal
What is Non-Cascading Transaction Tax (NCT)?
Non-Cascading Transaction Tax (NCT), is an all inclusive taxation system, that is in Draft Proposal stage, is aimed at superseding Income Tax, GST and Property Tax, by Collecting Tax on Credit Transactions, in a non-cascading approach, irrespective of transaction value and the mode of transaction (Digital Transaction / Cash Transaction), while applying specific exemptions to certain kind of transactions, and to specific industry use cases respectively.
The Collected Tax Revenue will be appropriately shared between all the Beneficiaries (i.e., Central, State & Local Governments, in addition to Banks, that facilitated the transaction), this has the potential to root out black money, by including everyone in the tax scope, and is being proposed as an alternative Taxation System in India, by Ideal Nation, in Year 2019. The details of the Draft Proposal, can be found at,
https://www.idealnation.net/2019/04/08/non-cascading-transaction-tax/
A brief comparison between the two taxation systems follows:
| Banking Transaction Tax (BTT) | Non-Cascading Transaction Tax (NCT Tax) |
| 1) Collect Transaction Tax on P2P, P2M, B2B, Organization 2 Organization Transactions flat, without any exemptions to anyone. | 1) Collect Transaction Tax on P2P, P2M, B2B, Organization 2 Organization Transactions flat, while applying specific exemptions to certain kind of transactions, and to specific industries respectively. |
| 2) Cascading of Transaction Tax is possible in the case of P2M / B2B Transactions etc… | 2) Efforts are clearly made to ensure, Taxation happens in Non-Cascading approach only. |
|
3) This is proposed to be charged at 2% Flat,
irrespective of whether the Subject is an Individual /
Organization.
| 3) This is proposed to be charged as per respective Flat Tax Rates to Individuals / Organizations, Transaction Tax for Individuals: 3%. Transaction Tax for Organizations: 6%. |
| 4) Cash Transactions are to be allowed in the scope of Rs.50 as highest denomination, and Rs.2000, as upper limit, thus exempting those transactions, from the tax net. | 4) While Cash Transactions are not allowed w.r.t. P2P Transactions, it is allowed in the scope of P2M / B2B / Organization 2 Organization Transactions, and Organizations are mandated to reverse charge Tax specifically on Cash Transactions, and regularly pay that collected tax to the NCT Tax Department. While the Upper Limit of Cash Transactions is proposed to be set to Rs.50000 to start with, it is suggested to be reduced to less than Rs.5000, in 1 to 2 years span, while ensuring, Organizations in every industry adopt Digital transactions in prime time. |
| 5) The concept of submitting Tax Returns, is a thing of the past, for both Individuals / Organizations. | 5) No Tax Returns to Individuals, while Tax Returns still prevail for Organizations. |
| 6) The concept of Input Tax Credit / Refunds does not exist, as per this proposal. |
6) The concept of Input Tax Credit / Refunds
does not exist, for Individuals, while it is allowed to be Claimed
by Organizations, for Industry Specific Business Expenditure Only.
|
| 7) No Exemption of Tax Payments, to Political, Spiritual and Non-Profit Organizations. | 7) A Conditional Refund Policy, in terms of 100% Tax Refund, is being proposed to be given to Political, Spiritual and Non-Profit Organizations, if and only if, they Submit timely Tax Returns, with accuracy and well before deadlines, for corresponding Assessment Year. Any unclaimed amounts, in this scenario, will be automatically forfeited by the NCT Tax Department, post the Tax Return Submission Deadline of corresponding Assessment Year. |
| 8) Proposes Cashless Majority Economy, while Cash Transactions are allowed, in minimal scope. | 8) Similar to Banking Transaction Tax (BTT), NCT Tax proposes 80% to 90% Cashless Majority Economy, while Cash Economy prevails, to be helpful in times of extreme natural disasters etc… scenarios. |
This is a Request for Comment to everyone, in the scope of sharing your Feedback / Comment / Suggestion, along with Acceptance / Non-Acceptance, through Comments Section and Like / Dislike options, that can be done by logging in to the Website (with Linkedin / Twitter / Google), on the Policy Reform Proposal, “Non-Cascading Transaction Tax – An Inclusive Taxation Scheme Proposal”, that can be found at, https://www.idealnation.net/2019/04/08/non-cascading-transaction-tax/.
