KEY FEATURES OF BUDGET 2017- 18
1. In the last two and half
years administration has moved from discretionary, favouritism based to system
and transparency based
2. Inflation brought under
control. CPI-based inflation declined from 6% in July 2016 to 3.4% in December,
2016
3. Economy has moved on a high
growth path. India’s Current Account Deficit declined from about 1% of GDP last
year to 0.3% of GDP in the first half of 2016-17. FDI grew 36% in H1 2016-17
over H1 2015-16, despite 5% reduction in global FDI inflows. Foreign exchange
reserves have reached 361 billion US Dollars as on 20th January, 2017
4. War against black money
launched
5. Government continued on path
of fiscal consolidation, without compromising on public investment.
6. The Indian economy has been
robust to mild shocks and IMF forecasts, India to be one of the fastest growing
major economies in 2017
CHALLENGES IN 2017-18
CHALLENGES IN 2017-18
1. World economy faces
considerable uncertainty, in the aftermath of major economic and political
developments during the last year.
2. The US Federal Reserve's ,
intention to increase policy rates in 2017, may lead to lower capital inflows
and higher outflows from the emerging economies .
3. Uncertainty around commodity
prices, especially that of crude oil, has implications for the fiscal situation
of emerging economies
4. Signs of retreat from
globalisation of goods, services and people, as pressures for protectionism are
building up
TRANSFORMATIONAL REFORMS IN
LAST YEAR
1. Passage of the Constitution
Amendment Bill for GST and the progress for its introduction
2. Demonetisation of high
denomination bank notes
3. Enactment of the Insolvency
and Bankruptcy Code; amendment to the RBI Act for inflation targeting; enactment
of the Aadhar bill for disbursement of financial subsidies and benefits.
4. Budget 2017-18 contains 3
major reforms. First, presentation of Budget advanced to 1st February to enable
the Ministries to operationalise all activities from the commencement of the
financial year.
Second, merger of Railways
Budget with General Budget to bring Railways to the centre stage of Government’s
Fiscal Policy and Third, removal of plan and nonplan classification of
expenditure to facilitate a holistic view of allocations for sectors and
ministries
DEMONITISATION
1. Bold and decisive measure to
curb tax evasion and parallel economy
DEMONITISATION
2. Government’s resolve to
eliminate corruption, black money, counterfeit currency and terror funding
3. Drop in economic activity, if
any, to be temporary
4. Generate long term benefits
including reduced corruption, greater digitisation, increased flow of financial
savings and greater formalisation of the economy
5. Pace of remonetisation has
picked up and will soon reach comfortable levels
6. The surplus liquidity in the
banking system will lower borrowing costs and increase the access to credit
7. Announcements made by the
Honourable Prime Minister on 31st Dec, 2016 focusing on housing for the poor;
relief to farmers; credit support to MSMEs; encouragement to digital
transactions; assistance to pregnant women and senior citizens; and priority to
dalits, tribals, backward classes and women under the Mudra Yojana, address key
concerns of our economy
1. Agenda for 2017-18 is:
“Transform, Energise and Clean India”
2. TEC India TEC India seeks to
• Transform the quality of
governance and quality of life of our people;
• Energise various sections of society, especially the youth and the vulnerable, and enable them to unleash their true potential; and
• Clean the country from the evils of corruption, black money and non-transparent political funding
• Energise various sections of society, especially the youth and the vulnerable, and enable them to unleash their true potential; and
• Clean the country from the evils of corruption, black money and non-transparent political funding
Ten distinct themes to foster
this broad agenda:
• Farmers: committed to double
the income in 5 years.
• Rural Population : providing employment & basic infrastructure;
• Youth : energising them through education, skills and jobs;
• The Poor and the Underprivileged : strengthening the systems of social security, health care and affordable housing;
• Infrastructure: for efficiency, productivity and quality of life;
• Financial Sector : growth & stability by stronger institutions;
• Digital Economy : for speed, accountability and transparency;
• Public Service : effective governance and efficient service delivery through people’s participation;
• Prudent Fiscal Management: to ensure optimal deployment of resources and preserve fiscal stability;
• Tax Administration: honouring the honest
FARMERS
• Rural Population : providing employment & basic infrastructure;
• Youth : energising them through education, skills and jobs;
• The Poor and the Underprivileged : strengthening the systems of social security, health care and affordable housing;
• Infrastructure: for efficiency, productivity and quality of life;
• Financial Sector : growth & stability by stronger institutions;
• Digital Economy : for speed, accountability and transparency;
• Public Service : effective governance and efficient service delivery through people’s participation;
• Prudent Fiscal Management: to ensure optimal deployment of resources and preserve fiscal stability;
• Tax Administration: honouring the honest
FARMERS
1. Target for agricultural
credit in 2017-18 has been fixed at a record level of Rs. 10 lakh crores
2. Farmers will also benefit
from 60 days’ interest waiver announced on 31 Dec 2016.
3. To ensure flow of credit to
small farmers, Government to support NABARD for computerisation and integration
of all 63,000 functional Primary Agriculture Credit Societies with the Core
Banking System of District Central Cooperative Banks. This will be done in 3
years at an estimated cost of Rs. 1,900 crores.
4. Coverage under Fasal Bima
Yojana scheme will be increased from 30% of cropped area in 2016-17 to 40% in
2017-18 and 50% in 2018-19 for which a budget provision of Rs. 9000 crore has
been made.
5. New mini labs in Krishi
Vigyan Kendras (KVKs) and ensure 100% coverage of all 648 KVKs in the country
for soil sample testing.
6. As announced by the
Honourable Prime Minister, the Long Term Irrigation Fund already set up in
NABARD to be augmented by 100% to take the total corpus of this Fund to Rs.
40,000 crores.
7. Dedicated Micro Irrigation
Fund in NABARD to achieve ‘per drop more crop with an initial corpus of Rs.
5,000 crores Coverage of National Agricultural Market (e-NAM) to be expanded
from250 markets to 585 APMCs. Assistance up to Rs. 75 lakhs will be provided to
every e-NAM.
8. A model law on contract
farming to be prepared and circulated among the States for adoption
9. Dairy Processing and
Infrastructure Development Fund to be set up in NABARD with a corpus of Rs. 2000
crores and will be increased to Rs. 8000 crores over 3 years
RURAL POPULATION
RURAL POPULATION
1. Over Rs. 3 lakh crores spent
in rural areas every year, for rural poor from Central Budget, State Budgets,
Bank linkage for self-help groups, etc
2. Aim to bring one crore
households out of poverty and to make 50,000 Gram Panchayats poverty free by
2019, the 150th birth anniversary of Gandhiji
3. Against target of 5 lakh farm
ponds under MGNREGA, 10 lakh farm ponds would be completed by March 2017. During
2017-18, another 5 lakh farm ponds will be taken up
4. Women participation in
MGNREGA has increased to 55% from less than48%
5. MGNREGA allocation to be the
highest ever at Rs. 48,000 crores in2017-18.
6. Pace of construction of PMGSY
roads accelerated to 133 km roads per day in 2016-17, against an avg. of 73 km
during 2011-2014
7. Government has taken up the
task of connecting habitations with more than 100 persons in left wing extremism
affected Blocks under PMGSY. All such habitations are expected to be covered by
2019 and the allocation for PMGSY, including the State's Share is Rs. 27,000
crores in 2017-18
8. Allocation for Pradhan Mantri
Awaas Yojana – Gramin increased fromRs. 15,000 crores in BE 2016-17 to Rs.
23,000 crores in 2017-18 with a target to complete 1 crore houses by 2019 for
the houseless and those living in kutcha houses.
9. Well on our way to achieving
100% village electrification by 1st May 2018.
10. Allocation for Prime
Minister's Employment Generation Program and Credit Support Schemes has been
increased three fold
11. Sanitation coverage in rural
India has gone up from 42% in Oct 2014 to about 60%. Open Defecation Free
villages are now being given priority for piped water supply.
12. As part of a sub mission of
the National Rural Drinking Water Programme(NRDWP), it is proposed to provide
safe drinking water to over 28,000 arsenic and fluoride affected habitations in
the next four years.
13. For imparting new skills to
people in rural areas, mason training will be provided to 5 lakh persons by 2022
14. A programme of “human
resource reforms for results” will be launched during 2017-18 for human
resources development in Panchayati Raj Institutions
15. Total allocation for Rural,
Agriculture and Allied sectors is Rs. 187223 crores
1. To introduce a system of
measuring annual learning outcomes in our schools
2. Innovation Fund for Secondary
Education proposed to encourage local innovation for ensuring universal access,
gender parity and quality improvement to be introduced in 3479 educationally
backward districts.
3. Good quality higher education
institutions to have greater administrative and academic autonomy
4. SWAYAM platform, leveraging
IT, to be launched with at least 350 online courses. This would enable students
to virtually attend courses taught by the best faculty
5. National Testing Agency to be
set-up as an autonomous and self-sustained premier testing organisation to
conduct all entrance examinations for higher education institutions
6. Pradhan Mantri Kaushal
Kendras to be extended to more than 600 districts across the country. 100 India
International Skills Centres will be established across the country.
7. Skill Acquisition and
Knowledge Awareness for Livelihood Promotion programme (SANKALP) to be launched
at a cost of Rs. 4000 crores. SANKALP will provide market relevant training to
3.5 crore
youth
8. Next phase of Skill
Strengthening for Industrial Value Enhancement(STRIVE) will also be launched in
2017-18 at a cost of Rs. 2,200 crores
9. A scheme for creating
employment in the leather and footwear industries along the lines in Textiles
Sector to be launched
10. Incredible India 2.0
Campaign will be launched across the world to promote tourism and employment.
THE POOR AND THE
UNDERPRIVILEGED
1. Mahila Shakti Kendra will be
set up with an allocation of Rs. 500 crores in 14lakh ICDS Anganwadi Centres.
This will provide one stop convergent support services for empowering rural
women with opportunities for skill development, employment, digital literacy,
health and nutrition
2. Under Maternity Benefit
Scheme Rs. 6,000 each will be transferred directly to the bank accounts of
pregnant women who undergo institutional delivery and vaccinate their children
3. Affordable housing to be
given infrastructure status
4. National Housing Bank will
refinance individual housing loans of about Rs. 20,000 crore in 2017-18
5. Government has prepared an
action plan to eliminate Kala-Azar and Filariasis by 2017, Leprosy by 2018,
Measles by 2020 and Tuberculosis by 2025 is also targeted
6. Action plan has been prepared
to reduce IMR from 39 in 2014 to 28 by2019 and MMR from 167 in 2011-13 to 100 by
2018-2020
7. To create additional 5,000
Post Graduate seats per annum to ensure adequate availability of specialist
doctors to strengthen Secondary and Tertiary levels of health care
8. Two new All India Institutes
of Medical Sciences to be set up in Jharkhandand Gujarat
9. To foster a conducive labour
environment, legislative reforms will be undertaken to simplify, rationalise and
amalgamate the existing labour laws into 4 Codes on (i) wages; (ii) industrial
relations; (iii) social security and welfare; and (iv) safety and working
conditions.
10. Propose to amend the Drugs
and Cosmetics Rules to ensure availability of drugs at reasonable prices and
promote use of generic medicines
11. The allocation for Scheduled
Castes has been increased by 35% compared to BE 2016-17. The allocation for
Scheduled Tribes has been increased to Rs. 31,920 crores and for Minority
Affairs to Rs. 4,195 crores
12. For senior citizens, Aadhar
based Smart Cards containing their healthdetails will be introduced
INFRASTRUCTURE
1. For transportation sector as
a whole, including rail, roads, shipping, provision of Rs. 2,41,387 crores has
been made in 2017-18.
2. For 2017-18, the total
capital and development expenditure of Railways has been pegged at Rs. 1,31,000
crores. This includes Rs. 55,000 crores provided by the Government
3. For passenger safety, a
Rashtriya Rail Sanraksha Kosh will be created witha corpus of Rs. 1 lakh crores
over a period of 5 years
4. Unmanned level crossings on
Broad Gauge lines will be eliminated by 2020
5. In the next 3 years, the
throughput is proposed to be enhanced by 10%.This will be done through
modernisation and upgradation of identified corridors.
6. Railway lines of 3,500 kms
will be commissioned in 2017-18. During2017-18, at least 25 stations are
expected to be awarded for station redevelopment.
7. 500 stations will be made
differently abled friendly by providing lifts and escalators.
8. It is proposed to feed about
7,000 stations with solar power in the medium term
9. SMS based Clean My Coach
Service has been started ‘Coach Mitra’, a single window interface, to register
all coach related complaints and requirements to be launched
10. By 2019, all coaches of
Indian Railways will be fitted with bio toilets. Tariffs of Railways would be
fixed, taking into consideration costs, quality of service and competition from
other forms of transport
11. A new Metro Rail Policy will
be announced with focus on innovative models of implementation and financing, as
well as standardisation and indigenisation of hardware and software
12. A new Metro Rail Act will be
enacted by rationalising the existing laws. This will facilitate greater private
participation and investment in construction and operation.
13. In the road sector, Budget
allocation for highways increased from Rs. 57,976 crores in BE 2016-17 to Rs.
64,900 crores in 2017-18
14. 2,000 kms of coastal
connectivity roads have been identified for construction and development
15. Total length of roads,
including those under PMGSY, built from 2014-15till the current year is about
1,40,000 kms which is significantly higher than previous three years
16. Select airports in Tier 2
cities will be taken up for operation and maintenance in the PPP mode
17. By the end of 2017-18, high
speed broadband connectivity on optical fibrewill be available in more than
1,50,000 gram panchayats, under BharatNet. A DigiGaon initiative will be
launched to provide tele-medicine, education and skills through digital
technology
18. Proposed to set up strategic
crude oil reserves at 2 more locations, namely, Chandikhole in Odisha and
Bikaner in Rajasthan. This will take our strategic reserve capacity to 15.33 MMT
19. Second phase of Solar Park
development to be taken up for additional20,000 MW capacity.
20. For creating an eco-system
to make India a global hub for electronics manufacturing a provision of Rs. 745
crores in 2017-18 in incentive schemes like M-SIPS and EDF.
21. A new and restructured
Central scheme with a focus on export infrastructure, namely, Trade
Infrastructure for Export Scheme (TIES) will be launched in 2017-18
FINANCIAL SECTOR
1. Foreign Investment Promotion
Board to be abolished in 2017-18 and further liberalisation of FDI policy is
under consideration
2. An expert committee will be
constituted to study and promote creation of an operational and legal framework
to integrate spot market and derivatives market in the agricultural sector, for
commodities trading. e- NAM to be an integral part of the framework.
3. Bill relating to curtail the
menace of illicit deposit schemes will be introduced. A bill relating to
resolution of financial firms will be introduced in the current Budget Session
of Parliament. This will contribute to stability and resilience of our financial
system
4. A mechanism to streamline
institutional arrangements for resolution of disputes in infrastructure related
construction contracts, PPP and public utility contracts will be introduced as
an amendment to the Arbitration and Conciliation Act 1996.
5. A Computer Emergency Response
Team for our Financial Sector (CERT-Fin)will be established
6. Government will put in place
a revised mechanism and procedure toensure time bound listing of identified
CPSEs on stock exchanges. The shares of Railway PSEs like IRCTC, IRFC and IRCON
will be listed in stock exchanges.
7. Propose to create an
integrated public sector ‘oil major’ which will be able to match the performance
of international and domestic private sector oil and gas companies
8. A new ETF with diversified
CPSE stocks and other Government holdings will be launched in 2017-18
9. In line with the
‘Indradhanush’ roadmap, Rs. 10,000 crores for recapitalisation of Banks provided
in 2017-18
10. Lending target under Pradhan
Mantri Mudra Yojana to be set at Rs. 2.44lakh crores. Priority will be given to
Dalits, Tribals, Backward Classes and Women.
1. 125 lakh people have adopted
the BHIM app so far. The Government will launch two new schemes to promote the
usage of BHIM; these are, Referral Bonus Scheme for individuals and a Cash back
Scheme for merchants
2. Aadhar Pay, a merchant
version of Aadhar Enabled Payment System, will be launched shortly
3. A Mission will be set up with
a target of 2,500 crore digital transactions for2017-18 through UPI, USSD,
Aadhar Pay, IMPS and debit cards
4. A proposal to mandate all
Government receipts through digital means, beyond a prescribed limit, is under
consideration
5. Banks have targeted to
introduce additional 10 lakh new POS terminals by March 2017. They will be
encouraged to introduce 20 lakh Aadhar based POS by September 2017
6. Proposed to create a Payments
Regulatory Board in the Reserve Bank of India by replacing the existing Board
for Regulation and Supervision of Payment and Settlement Systems
PUBLIC SERVICE
1. The Government e-market place
which is now functional for procurement of goods and services
2. To utilise the Head Post
Offices as front offices for rendering passport services
3. A Centralised Defence Travel
System has been developed through which travel tickets can be booked online by
our soldiers and officers
4. Web based interactive Pension
Disbursement System for Defence Pensioners will be established
5. To rationalise the number of
tribunals and merge tribunals whereverappropriate
6. Commemorate both Champaran
and Khordha revolts appropriately
PRUDENT FISCAL MANAGEMENT
1. Stepped up allocation for
Capital expenditure by 25.4% over the previous year
2. Total resources being
transferred to the States and the Union Territories with Legislatures is Rs.
4.11 lakh crores, against Rs. 3.60 lakh crores in BE 2016-17
3. For the first time, a
consolidated Outcome Budget, covering all Ministries and Departments, is being
laid along with the other Budget documents
4. FRBM Committee has
recommended 3% fiscal deficit for the next three years, keeping in mind the
sustainable debt target and need for public investment, fiscal deficit for
2017-18 is targeted at 3.2% of GDP and Government remains committed to achieve
3% in the following year
5. Net market borrowing of
Government restricted to Rs. 3.48 lakh crores after buyback in 2017-18, much
lower than Rs. 4.25 lakh crores of the previous year
6. Revenue Deficit of 2.3% in BE
2016-17 stands reduced to 2.1% in the Revised Estimates. The Revenue Deficit for
next year is pegged at 1.9% , against 2% mandated by the FRBM Act
PROMOTING AFFORDABLE HOUSING AND REAL ESTATE SECTOR
1. Between 8th November and 30th
December 2016, deposits between 2 lakh Rupees and 80 lakh Rupees were made in
about 1.09 crore accounts with an average deposit size of Rs. 5.03 lakh.
Deposits of more than 80 lakh were made in 1.48 lakh accounts with average
deposit size of Rs. 3.31 crores.
2. Under the scheme for
profit-linked income tax deduction for promotion of affordable housing, carpet
area instead of built up area of 30 and 60 Sq.mtr. will be counted.
3. The 30 Sq.mtr. limit will
apply only in case of municipal limits of 4metropolitan cities while for the
rest of the country including in the peripheral areas of metros, limit of 60
Sq.mtr. will apply
4. For builders for whom
constructed buildings are stock-in-trade, tax on notional rental income will
only apply after one year of the end of the year in which completion certificate
is received
5. Reduction in the holding
period for computing long term capital gains from transfer of immovable property
from 3 years to 2 years. Also, the base year for indexation is proposed to be
shifted from 1.4.1981 to 1.4.2001 for all classes of assets including immovable
property
6. For Joint Development
Agreement signed for development of property, the liability to pay capital gain
tax will arise in the year the project is completed
7. Exemption from capital gain
tax for persons holding land on 2.6.2014, the date on which the State of Andhra
Pradesh was reorganised, and whose land is being pooled for creation of capital
city of Andhra Pradesh under the Government scheme
MEASURES FOR STIMULATING
GROWTH
1. Concessional withholding rate
of 5% charged on interest earned by foreign entities in external commercial
borrowings or in bonds and Government securities is extended to 30.6.2020. This
benefit is also extended to Rupee Denominated (Masala) Bonds
2. For the purpose of carry
forward of losses in respect of start-ups, the condition of continuous holding
of 51% of voting rights has been relaxed subject to the condition that the
holding of the original promoter/promoters continues. Also the profit (linked
deduction) exemption available to the start-ups for 3 years out of 5 years is
changed to 3 years out of 7 years
3. MAT credit is allowed to be
carried forward up to a period of 15 years instead of 10 years at present
4. In order to make MSME
companies more viable, income tax for companies with annual turnover upto Rs. 50
crore is reduced to 25%
5. Allowable provision for
Non-Performing Asset of Banks increased from7.5% to 8.5%. Interest taxable on
actual receipt instead of accrual basis in respect of NPA accounts of all
non-scheduled cooperative banks also to be treated at par with scheduled banks
6. Basic customs duty on LNG
reduced from 5% to 2.5%
PROMOTING DIGITAL ECONOMY
PROMOTING DIGITAL ECONOMY
1. Under scheme of presumptive
income for small and medium tax payers whose turnover is upto 2 crores, the
present, 8% of their turnover which is counted as presumptive income is reduced
to 6% in respect of turnover which is by non-cash means
2. No transaction above Rs. 3
lakh would be permitted in cash subject to certain exceptions
3. Miniaturised POS card reader
for m-POS (other than mobile phones or tablet computers), micro ATM standards
version 1.5.1, Finger Print Readers / Scanners and Iris Scanners and on their
parts and components for manufacture of such devices to be exempt from BCD,
Excise/CV duty and SAD
TRANSPARENCY IN ELECTORAL
FUNDING
1. Need to cleanse the system of
political funding in India
2. Maximum amount of cash
donation, a political party can receive, will be Rs. 2000/- from one person.
3. Political parties will be
entitled to receive donations by cheque or digital mode from their donors.
4. Amendment to the Reserve Bank
of India Act to enable the issuance of electoral bonds in accordance with a
scheme that the Government of India would frame in this regard.
5. Every political party would
have to file its return within the time prescribed in accordance with the
provision of the Income-tax Act
6. Existing exemption to the
political parties from payment of income-tax would be available only subject to
the fulfilment of these conditions
EASE OF DOING BUSINESS
EASE OF DOING BUSINESS
1. Scope of domestic transfer
pricing restricted to only if one of the entities involved in related party
transaction enjoys specified profit-linked deduction
2. Threshold limit for audit of
business entities who opt for presumptive income scheme increased from Rs. 1
crore to Rs. 2 crores. Similarly, the threshold for maintenance of books for
individuals and HUF increased from turnover of 10 lakhs to 25 lakhs or income
from 1.2 lakhs to 2.5 lakhs
3. Foreign Portfolio Investor (FPI)
Category I& II exempted from indirect transfer provision. Indirect transfer
provision shall not apply in case of redemption of shares or interests outside
India as a result of or arising out of redemption or sale of investment in India
which is chargeable to tax in India
4. Commission payable to
individual insurance agents exempt from the requirement of TDS subject to their
filing a self-declaration that their income is below taxable limit
5. Under scheme for presumptive
taxation for professionals with receipt upto Rs. 50 lakhs p.a. advance tax can
be paid in one instalment instead of four
6. Time period for revising a
tax return is being reduced to 12 months from completion of financial year, at
par with the time period for filing of return. Also the time for completion of
scrutiny assessments is being compressed further from 21 months to 18 months for
Assessment Year 2018-19 and further to 12 months for Assessment Year 2019-20 and
thereafter
PERSONAL INCOME-TAX
PERSONAL INCOME-TAX
1. Existing rate of taxation for
individual assesses between income of Rs.2.5 lakhs to 5 lakhs reduced to 5% from
the present rate of 10% .
2. Surcharge of 10% of tax
payable on categories of individuals whose annual taxable income is between
Rs.50 lakhs and Rs. 1 crore
3. Simple one-page form to be
filed as Income Tax Return for the category of individuals having taxable income
upto Rs. 5 lakhs other than business income
4. Appeal to all citizens of
India to contribute to Nation Building by making a small payment of 5% tax if
their income is falling in the lowest slab of 2.5 lakhs to 5 lakhs.
1. The GST Council has finalised
its recommendations on almost all the issues based on consensus on the basis of
9 meetings held
2. Preparation of IT system for
GST is also on schedule.
3. The extensive reach-out
efforts to trade and industry for GST will start from 1st April, 2017 to make
them aware of the new taxation system.
RAPID (Revenue, Accountability,
Probity, Information and Digitisation)
1. Maximise efforts for
e-assessment in the coming year
2. Enforcing greater
accountability of officers of Tax Department for specific act of commission and
omission.
1. Additional Revenue Mobilisation (ARM) and Anti-abuse Measures
1.1 It is proposed to extend the provisions of section 115BBDA of the Income-tax Act which provides for levy of tax at the rate of ten per cent. on dividend income exceeding `10 lakh, to all resident persons except domestic companies or trust or institution or fund registered under section 12AA or referred to in section 10(23C). Presently, these provisions are applicable only to the individuals, Hindu undivided family (HUF) and firms.
Annex III to Part B of Budget
Speech
DIRECT TAXES
1. Additional Revenue Mobilisation (ARM) and Anti-abuse Measures
1.1 It is proposed to extend the provisions of section 115BBDA of the Income-tax Act which provides for levy of tax at the rate of ten per cent. on dividend income exceeding `10 lakh, to all resident persons except domestic companies or trust or institution or fund registered under section 12AA or referred to in section 10(23C). Presently, these provisions are applicable only to the individuals, Hindu undivided family (HUF) and firms.
1.2 It is proposed to widen the
scope of section 56 of the Income-tax Act to provide that any money, immovable
property or specified movable property received without consideration or with
inadequate consideration, by any person, subject to certain exemption and
exceptions, shall be taxable if its value exceeds rupees fifty thousand.
1.3 It is proposed to provide
that in case of transfer of unquoted equity shares, where the fair market value,
determined in the prescribed manner is less than the consideration received,
such fair market value shall be the deemed value of consideration for the
purpose of computation of capital gains.
1.4 It is proposed to restrict
the exemption from long term capital gains in case of transfer of listed shares
by providing that the exemption, subject to notification of certain exceptions,
shall be available if security transaction tax has been paid at the time of
acquisition of such shares where they have been acquired after 1st October,
2004.
1.5 It is proposed to introduce
a new provision in the Income-tax Act to provide for tax deduction at source at
the rate of five per cent. by an individual or HUF, other than those whose books
of account are required to be audited, while making payment of rent of an amount
exceeding `50,000 per month. It is also proposed to provide that such tax shall
be deducted and deposited only once in a financial year through a challan-cum-statement.
Further, the deductor shall not be required to obtain TAN or file any separate
TDS return for this purpose.
1.6 In order to align the
transfer pricing provisions with the OECD transfer pricing guidelines and
international best practices, it is proposed to insert a new section to provide
that the assesse shall make secondary adjustment where the primary adjustment to
the transfer price has been made in certain cases. The provision shall apply if
the primary adjustment exceeds one crore rupees and the excess money
attributable to the adjustment is not brought to India within the prescribed
time.
1.7 In order to address the
issue of thin capitalisation, it is proposed to provide that the interest paid
by an Indian company or permanent establishment of a foreign company, in excess
of thirty percent of earnings before interest, taxes, depreciation and
amortisation (EBITDA), or interest paid to its associated enterprise, whichever
is less, shall not be allowed as deduction in computing its taxable profit. It
is also proposed to allow carry forward and set off of the interest so
disallowed for eight assessment years.
1.8 In order to address the
existing anomaly of interest deduction in respect of let out property vis-à-vis
self-occupied property, it is proposed to restrict set off of loss from house
property against income under any other head during the current year up to Rs
two lakhs. The loss not so set off would be allowed to be carried forward for
set off against house property income for eight assessment years.
1.9 It is proposed that donation
by an entity registered under section 12A or approved under section 10(23C), to
other entity, registered under section 12A, with the direction that such
donation shall form part of the corpus, shall not be treated as application of
income for charitable purposes.
2. Rationalisation Measures
2.1 It is proposed to provide
that in case of foreign company, sale of leftover stock of crude oil in case of
strategic petroleum reserve after the expiry of agreement or the arrangement,
subject to fulfilment of certain conditions, shall not be liable to tax in
India.
2.2 It is proposed to provide a
concessional tax rate of ten per cent. in case of income arising from sale of
carbon credit.
2.3 It is proposed to exempt
government, foreign missions and state PSUs engaged in business of
transportation of passengers from Tax Collection at Source (TCS) provisions
relating to purchase of vehicles.
2.4 It is proposed to provide
that the fair market value of the asset which has been taken into account for
the purpose of computation of accreted income on which tax has been paid in
accordance with provisions of Chapter XII-EB of the Income-tax Act, shall be
taken as the cost of acquisition of that asset.
2.5 It is proposed to modify the
conditions of special taxation regime for off shore funds under section 9A of
the Income-tax Act so as to provide that the maintenance of minimum fund size
would not be necessary in the year in which the fund is being wound up.
2.6 In line with exemption
available to the Prime Minister’s Relief Fund and certain other funds, it is
proposed to provide that the income of the Chief Minister’s Relief Fund or the
Lieutenant Governor’s Relief Fund shall be exempt from tax.
2.7 It is proposed to do away
with the provisions enabling the Assessing Officer not to process the return and
thus withhold the refund in cases where the return is selected for scrutiny till
the completion of assessment. It is however proposed that in cases where grant
of refund is likely to adversely affect the interest of revenue, it can be
withheld with the approval of the higher authority after recording the reasons
in writing.
2.8 It is proposed to provide
that certain entities, like, Investor Protection Funds, Core Settlement
Guarantee Fund, Tea/Coffee/Rubber Boards, MPEDA, or APDEA; enjoying exemption
from levy of income-tax under section 10 of the Income-tax Act shall be required
to furnish return of their income.
2.9 In order to ensure timely
filing of returns of income, it is proposed to levy a fee in case of delay in
filing the return.
2.10 It is proposed to provide
that if an accountant or a merchant banker or a registered valuer, furnishes
incorrect information in a report or certificate, he shall be liable to a
penalty of ten thousand rupees for each such default.
2.11 It is proposed to provide
that where the amount of foreign tax credit (FTC) allowed against the tax paid
under sections 115JB or 115JC of the Income-tax Act exceeds the amount of FTC
admissible against the tax payable by the assesse on his income in accordance
with the other provisions of the Act, such excess credit shall be ignored while
computing the amount of credit under section 115JAA or section 115JD.
2.12 In a case where the foreign
tax credit has not been granted to the assesse on the ground that payment of
such tax is in dispute, it is proposed to provide, subject to certain
conditions, additional time to the Assessing Officer for allowing the said tax
credit after such dispute is settled.
2.13 It is proposed to provide
that no person shall receive payment or aggregate of payments of an amount of
three lakh rupees or more from a person in a day, or in respect of a single
transaction, or in respect of transactions relating to one event or occasion,
otherwise than by an account payee cheque or account payee bank draft or use of
electronic clearing system through a bank account. Such restriction shall not
apply to Government, banks or such other persons or class of persons or receipts
notified by the Central Government. It is also proposed to provide for a penalty
in case of contravention of this provision.
2.14 It is proposed to clarify
that provisions relating to tax deduction at source shall not apply to exempt
compensation received under the Right to Fair Compensation and Transparency in
Land Acquisition, Rehabilitation and Resettlement Act, 2013.
2.15 It is proposed to lower the
rate of deduction of tax in case of payments made to a person engaged only in
the business of operation of call centre.
2.16 It is proposed to provide
tax neutrality in case of conversion of preference shares of a company into
equity shares of that company.
2.17 It is proposed to provide
that the cost of acquisition of share of an Indian company in the hands of
demerged foreign company in a tax neutral demerger, shall be taken as the cost
of acquisition in the hands of resulting foreign company.
2.18 It is proposed to provide
for grant of interest in case of refund of excess payment of TDS.
2.19 It is proposed to merge the
Authority for Advance Ruling (AAR) for Income-Tax with AAR for Customs, Central
Excise and Service Tax; and create common AAR. It is also proposed to amend the
qualifications for appointment of Chairman and Members.
2.20 It is proposed to make the
orders passed by the authority under section 10(23C) of the Income-tax Act,
appealable before the Tribunal.
2.21 It is proposed to authorise
the Central Board of Direct Taxes (CBDT), to issue directions or instructions in
order to remove hardships faced by the taxpayers in connection with imposition
of penalty relating to tax deduction or collection at source.
2.22 It is proposed to amend the
provisions relating to computation of book profit for the purpose of levy of
minimum alternate tax (MAT) so as to align it with the Indian Accounting
Standards (Ind-AS).
2.23 It is proposed to clarify
that the amendment made by the Finance Act, 2016 in Section 112 of the
Income-tax Act providing for concessional rate of tax in respect of transfer of
share of a private limited company shall be applicable retrospectively from
assessment year 2013-14.
2.24 It is proposed to amend
section 10AA of the Income-tax Act so as to provide that the amount of deduction
referred therein shall be allowed from the total income computed in accordance
with the provisions of the Act before giving effect to the provisions of the
said section and that the said deduction shall not exceed the total income.
2.25 It is proposed to clarify
that in the case of furnishing of information relating to payment to a
non-resident of any sum whether or not chargeable to tax, the “person
responsible for paying” shall be the payer himself, or, if the payer is a
company, the company itself including the principal officer thereof.
2.26 It is proposed to provide
that where any ‘term’ used in an agreement entered into under sub-section (1) of
Section 90 and 90A of the Income-tax Act, is defined under the said agreement,
the said term shall be assigned the meaning as provided in the said agreement
and where the term is not defined in the agreement, but is defined in the Act,
it shall be assigned the meaning as defined in the Act or any technical
explanation issued by the Central Government.
2.27 It is proposed to provide
that where the capital asset referred to in section 35AD of the Income-tax Act
is used for an ineligible business and the benefit of said section is withdrawn,
the actual cost to the assessee in respect of such asset shall be the actual
cost to the assessee, as reduced by an amount equal to the amount of
depreciation calculated at the rate in force that would have been allowable had
the asset been used for the purposes of business since the date of its
acquisition.
2.28 It is proposed to provide
that a trust or an institution, which has been granted registration, and, has
adopted or undertaken modification of the objects subsequently which do not
conform to the conditions of registration, shall be required to obtain fresh
registration.
2.29 In order to strengthen the
TCS regime, it is proposed to provide that the collectee shall furnish his PAN
to the collector, failing which, tax shall be collected at a higher rate.
2.30 In order to provide parity
between an individual who is an employee and an individual who is self-employed,
it is proposed to provide that the self-employed individual shall be eligible
for deduction upto twenty per cent of his gross total income in respect of
contribution made to National Pension System Trust.
2.31 It is proposed to provide
that the authorised officer can, subject to conditions as specified,
provisionally attach a property for a period of six months in order to protect
the interest of revenue. It is also proposed to provide that he can make a
reference to the valuation officer for the purpose of estimation of FMV of a
property.
2.32 It is proposed to authorise
the Joint Director, Deputy Director or the Assistant Director of Income-tax to
call for information for the purpose of any enquiry without seeking approval of
the higher authority.
2.33 It is proposed to expand
the provision of section 133A of the Income-tax Act so as to include any place
at which activity for charitable purpose is carried on.
2.34 It is proposed to authorise
the CBDT to frame a scheme for centralised issuance of notice calling for
information and documents for the purpose of verification of information in its
possession, processing of such documents and making the outcome thereof
available to the Assessing Officer.
2.35 In order to remove
hardship, it is proposed to omit section 197(C) of the Finance Act, 2016 which
provided for assessment of undisclosed income relating to any period prior to
commencement of the Income Declaration Scheme, 2016. However, in search cases,
it is proposed to provide that in case tangible evidence is found during the
search, the Assessing Officer can assess income upto ten years preceding the
year in which search took place.
2.36 In order to strengthen the
TDS provisions, it is proposed to provide that a disallowance shall be made in
respect of an expenditure incurred against income from other sources unless tax
has been deducted thereon at applicable rates.
2.37 In order to maintain the
confidentiality of the source of the information and the identity of the
informer, it is proposed to clarify that the reasons to believe as recorded by
the income-tax authority authorising a search operation or a requisition of
books of account or asset, shall not be disclosed to any person, authority or
appellate tribunal.
2.38 It is proposed to provide
that in case of unit in the consolidated plan of a mutual fund scheme received
in lieu of unit in the consolidating plan, the actual cost and the period of
holding shall be the cost and the period of holding of the unit in the
consolidating plan.
2.39 It is proposed to amend the
provision of clause 4 of section 10 of the Income-tax Act, 1961 so as to make
the correct reference to Foreign Exchange Management Act (FEMA).
2.40 It is proposed to provide a
sun set clause in respect of deduction allowed to certain persons in respect of
investment in listed equity shares and listed units of an equity oriented fund.
2.41 It is proposed to exempt
capital gains arising out of transfer of a rupee denominated bond by a
non-resident to a non-resident.
INDIRECT TAXES
I. PROPOSALS INVOLVING CHANGE IN DUTY / TAX RATES:
CUSTOMS
Commodity
|
Rate of Duty
|
|||
From
|
To
|
|||
I.
|
Incentivizing domestic value addition,
‘Make in India’
|
|||
A.
|
Reduction in Customs duty on inputs and
raw materials to reduce costs
|
|||
Mineral fuels
and Mineral oils
|
||||
1.
|
Liquefied Natural
Gas
|
BCD – 5%
|
BCD – 2.5%
|
|
Chemicals &
Petrochemicals
|
||||
2.
|
Medium Quality
Terephthalic Acid (MTA) & Qualified Terephthalic Acid (QTA)
|
BCD – 7.5%
|
BCD – 5%
|
|
Metals
|
||||
3.
|
Nickel
|
BCD – 2.5%
|
BCD – Nil
|
|
Finished
Leather
|
||||
4.
|
Vegetable tanning
extracts, namely, Wattle extract and Myrobalan fruit extract
|
BCD – 7.5%
|
BCD – 2.5%
|
|
Capital Goods
|
||||
5.
|
Ball screws,
linear motion guides and CNC systems for use in the manufacture of CNC
machine tools, subject to actual user condition
|
Ball screws and
liner motion guides
BCD – 7.5%
CNC systems
BCD – 10%
|
BCD – 2.5%
|
|
Renewable
Energy
|
||||
6.
|
All items of
machinery required for fuel cell based power generating systems to be set
up in the country or for demonstration purposes, subject to certain
specified conditions
|
BCD – 10% /7.5%
CVD – 12.5%
|
BCD – 5%
CVD – 6%
|
|
7.
|
All items of
machinery required for balance of systems operating on biogas/
bio-methane/ by-product hydrogen, subject to certain specified conditions
|
BCD – 10% /7.5%
CVD – 12.5%
|
BCD – 5%
CVD – 6%
|
|
Miscellaneous
|
||||
8.
|
All parts for use
in the manufacture of LED lights or fixtures, including LED lamps, subject
to actual user condition
|
Applicable BCD,
CVD
|
BCD – 5%
CVD – 6%
|
|
9.
|
All inputs for use
in the manufacture of LED Driver and MCPCB for LED lights or fixtures,
including LED lamps, subject to actual user condition
|
Applicable BCD
|
5%
|
|
B.
|
Changes in
Customs and Excise / CV duty to address the problem of duty inversions in
certain sectors
|
|||
Chemicals &
Petrochemicals
|
||||
10.
|
o-Xylene
|
BCD – 2.5%
|
BCD – Nil
|
|
11.
|
2-Ethyl
Anthraquinone [29146990] for use in manufacture of hydrogen peroxide,
subject to actual user condition
|
BCD – 7.5%
|
BCD – 2.5%
|
|
12.
|
Vinyl Polyethylene
Glycol (VPEG) for use in manufacture of Poly Carboxylate Ether, subject to
actual user condition
|
BCD – 10%
|
BCD – 7.5%
|
|
Textiles
|
||||
13.
|
Nylon mono
filament yarn for use in monofilament long line system for Tuna fishing,
subject to certain specified conditions
|
BCD – 7.5%
|
BCD – 5%
|
|
Metals
|
||||
14.
|
Co-polymer coated
MS tapes / stainless steel tapes for manufacture of specified
telecommunication grade optical fibres or optical fibre cables, subject to
actual user condition
|
BCD – Nil
|
BCD – 10%
|
|
15.
|
MgO coated cold
rolled steel coils [7225 19 90] for use in the manufacture of CRGO steel,
subject to actual user condition
|
BCD – 10%
|
BCD – 5%
|
|
16.
|
Hot Rolled Coils
[7208] for use in the manufacture of welded tubes and pipes falling under
heading 7305 or 7306, subject to actual user condition
|
BCD – 12.5%
|
BCD – 10%
|
|
Automobiles
|
||||
17.
|
Clay 2 Powder
(Alumax) for use in ceramic substrate for catalytic convertors, subject to
actual user conditon
|
BCD – 7.5%
|
BCD – 5%
|
|
Renewable
Energy
|
||||
18.
|
Solar tempered
glass for use in the manufacture of solar cells/panels/modules
|
BCD – 5%
|
BCD – Nil
|
|
19.
|
Parts/raw
materials for use in the manufacture of solar tempered glass for use in
solar photovoltaic cells/modules, solar power generating equipment or
systems, flat plate solar collector, solar photovoltaic module and panel
for water pumping and other applications, subject to actual user condition
|
CVD – 12.5%
|
CVD – 6%
|
|
20.
|
Resin and catalyst
for use in the manufacture of cast components for Wind Operated Energy
Generators [WOEG], subject to actual user condition
|
BCD – 7.5%
CVD – 12.5%
SAD – 4%
|
BCD – 5%
CVD – Nil
SAD – Nil
|
|
Miscellaneous
|
||||
21.
|
Membrane Sheet and
Tricot / Spacer for use in the manufacture of RO membrane element for
household type filters, subject to actual user condition
|
CVD – 12.5%
|
CVD – 6%
|
|
C.
|
Changes in Customs duty to provide adequate protection to domestic
industry
|
|||
Food Processing
|
||||
22.
|
Cashew nut,
roasted, salted or roasted and salted
|
BCD – 30%
|
BCD – 45%
|
|
Electronics /
Hardware
|
||||
23.
|
Populated Printed
Circuit Boards (PCBs) for use in the manufacture of mobile phones, subject
to actual user condition
|
SAD – Nil
|
SAD – 2%
|
|
Miscellaneous
|
||||
24.
|
RO membrane
element for household type filters
|
BCD – 7.5%
|
BCD – 10%
|
|
D.
|
Promotion of cashless transactions and promote domestic manufacturing of
devices used therefor
|
|||
25.
|
a)
Miniaturized POS card reader for m-POS
(not including mobile phones or tablet computer),
b)
Micro ATM as per standards version
1.5.1,
c)
Finger Print Reader / Scanner, and
d)
Iris Scanner
|
Applicable BCD,
CVD SAD
|
BCD – Nil
CVD – Nil
SAD – Nil
|
|
26.
|
Parts and
components for manufacture of:
a)
miniaturized POS card reader for m-POS
(not including mobile phones or tablet computer),
b)
micro ATM as per standards version
1.5.1,
c)
Finger Print Reader / Scanner, and
d)
Iris Scanner
|
Applicable BCD,
CVD SAD
|
BCD – Nil
CVD – Nil
SAD – Nil
|
|
II.
|
Imposition of export duty to conserve domestic resources
|
|||
27.
|
Other aluminium
ores, including laterite
|
Nil
|
15%
|
|
III.
|
Improving ease of doing business and Export Promotion
|
|||
28.
|
De-minimis customs
duties exemption limit for goods imported through parcels, packets and
letters
|
Duty payable not
exceeding Rs.100 per consignment
|
CIF value not
exceeding Rs.1000 per consignment
|
|
29.
|
Limit of duty free
import of eligible items for manufacture of leather footwear or synthetic
footwear or other leather products for use in the manufacture of said
goods for export
|
3% of FOB value of
said goods exported during the preceding financial year
|
5% of FOB value of
said goods exported during the preceding financial year
|
|
IV.
|
Anti-avoidance
measure
|
|||
30.
|
Silver medallion,
silver coins, having silver content not below 99.9%, semi-manufactured
form of silver and articles of silver
|
CVD – Nil
|
CVD – 12.5%
|
Note:
(a) “Basic Customs Duty” means the customs duty levied under
the Customs Act, 1962.
(b) “CVD” means the Additional Duty of Customs levied under sub-section (1) of section 3 of the Customs Tariff Act, 1975.
(c) “SAD” means the Special Additional Duty of Customs levied under sub-section (5) of section 3 of the Customs Tariff Act, 1975.
(d) “Export duty” means duty of Customs leviable on goods specified in the Second Schedule to the Customs Tariff Act, 1975.
(b) “CVD” means the Additional Duty of Customs levied under sub-section (1) of section 3 of the Customs Tariff Act, 1975.
(c) “SAD” means the Special Additional Duty of Customs levied under sub-section (5) of section 3 of the Customs Tariff Act, 1975.
(d) “Export duty” means duty of Customs leviable on goods specified in the Second Schedule to the Customs Tariff Act, 1975.
EXCISE
Commodity
|
Rate of Duty
|
|||
From
|
To
|
|||
I.
|
Public Health
|
|||
A.
|
Tobacco and Tobacco Products
|
|||
1.
|
Cigar and cheroots
|
12.5% or Rs.3755 per thousand, whichever is
higher
|
12.5% or Rs.4006 per thousand, whichever is
higher
|
|
2.
|
Cigarillos
|
12.5% or Rs.3755 per thousand, whichever is
higher
|
12.5% or Rs.4006 per thousand, whichever is
higher
|
|
3.
|
Cigarettes of tobacco substitutes
|
Rs.3755 per thousand
|
Rs.4006 per thousand
|
|
4.
|
Cigarillos of tobacco substitutes
|
12.5% or Rs.3755 per thousand, whichever is
higher
|
12.5% or Rs.4006 per thousand, whichever is
higher
|
|
5.
|
Others of tobacco substitutes
|
12.5% or Rs.3755 per thousand, whichever is
higher
|
12.5% or Rs.4006 per thousand, whichever is
higher
|
|
6.
|
Paper rolled biris –
handmade
|
Rs.21 per thousand
|
Rs.28 per thousand
|
|
7.
|
Paper rolled biris –
machine made
|
Rs.21 per thousand
|
Rs.78 per thousand
|
|
II.
|
Incentivizing domestic value addition, ‘Make in
India’
|
|||
A.
|
Renewable Energy
|
|||
8.
|
All items of machinery required for balance of
systems operating on biogas/ bio-methane/ by-product hydrogen
|
12.5%
|
6%
|
|
B.
|
Miscellaneous
|
|||
9.
|
Membrane Sheet and Tricot/Spacer for use in the
manufacture of RO membrane element for household type filters, subject to
actual user condition
|
12.5%
|
6%
|
|
10.
|
All parts for use in the manufacture of LED
lights or fixtures, including LED lamps, subject to actual user condition
|
Applicable duty
|
6%
|
|
11.
|
a.
Waste and scrap of precious metals or metals clad with precious
metals arising in course of manufacture of goods failing in Chapter 71
b.
Strips, wires, sheets, plates and foils of silver
c.
Articles of silver jewellery, other than those studded with
diamond, ruby, emerald or sapphire
d.
Silver coin of purity 99.9% and above, bearing a brand name when
manufactured from silver on which appropriate duty of customs or excise
has been paid
|
Nil
|
Nil, subject to the condition that no credit of
duty paid on inputs or input services or capital goods has been availed by
manufacturer of such goods
|
|
III.
|
Promotion of cashless transactions and promote domestic manufacturing of
devices used therefor
|
|||
12.
|
a)
Miniaturized POS card reader for m-POS (not including mobile phones
or tablet computers),
b)
micro ATM as per standards version 1.5.1,
c)
Finger Print Reader / Scanner, and
d)
Iris Scanner
|
Applicable duty
|
Nil
|
|
13.
|
Parts and components for manufacture of:
a)
Miniaturized POS card reader for m-POS (not including mobile phones
or tablet computers),
b)
Micro ATM as per standards version 1.5.1,
c)
Finger Print Reader / Scanner, and
d)
Iris Scanner
|
Applicable duty
|
Nil
|
Note: “Basic Excise Duty” means the excise duty set forth in the First
Schedule to the Central Excise Tariff Act, 1985.
CHANGES IN RATE OF ADDITIONAL DUTY LEVIED UNDER SECTION 85 OF THE
FINANCE ACT, 2005
Commodity
|
Rate of duty
|
|||
From
|
To
|
|||
A.
|
Pan Masala
|
|||
1.
|
Pan Masala
|
6%
|
9%
|
|
B.
|
Tobacco and Tobacco Products
|
|||
2.
|
Unmanufactured tobacco
|
4.2%
|
8.3%
|
|
3.
|
Non-filter Cigarettes of length not exceeding
65mm
|
Rs.215 per thousand
|
Rs.311 per thousand
|
|
4.
|
Non-filter Cigarettes of length exceeding 65mm
but not exceeding 70mm
|
Rs.370 per thousand
|
Rs.541 per thousand
|
|
5.
|
Filter Cigarettes of length not exceeding 65mm
|
Rs.215 per thousand
|
Rs.311 per thousand
|
|
6.
|
Filter Cigarettes of length exceeding 65mm but
not exceeding 70mm
|
Rs.260 per thousand
|
Rs.386 per thousand
|
|
7.
|
Filter Cigarettes of length exceeding 70mm but
not exceeding 75mm
|
Rs.370 per thousand
|
Rs.541 per thousand
|
|
8.
|
Other Cigarettes
|
Rs.560 per thousand
|
Rs.811 per thousand
|
|
9.
|
Chewing tobacco (including filter khaini)
|
6%
|
12%
|
|
10.
|
Jarda scented tobacco
|
6%
|
12%
|
|
11.
|
Pan Masala containing Tobacco (Gutkha)
|
6%
|
12%
|
SERVICE TAX
S.
No.
|
Changes
|
Existing
|
Proposed
|
|
A.
|
Relief to the armed
forces of the Union from service tax
|
|||
1.
|
Services provided or agreed to be
provided by the Army, Naval and Air Force Group Insurance Funds by way of
life insurance to members of the Army, Navy and Air Force under the Group
Insurance Schemes of the Central Government is being exempted from service
tax from 10th September, 2004 (the date when the services of life
insurance became taxable).
|
14%
|
Nil
|
|
B.
|
Dispute resolution, certainty of taxation and avoidance of litigation
|
|||
1.
|
Notification No.
41/2016-ST dated 22.09.2016, which has exempted from service tax, one time
upfront amount (called as premium, salami, cost, price, development charges
or by whatever name) payable for grant of long-term lease of industrial plots
(30 years or more) by State Government industrial development
corporations/undertakings to industrial units, is proposed to be made
effective from 1.6.2007 (the date when the services of renting of immovable
property became taxable).
|
14%
|
Nil
|
|
2.
|
Rule 2A of the Service Tax
(Determination of Value) Rules, 2006 is proposed to be amended from
01.07.2010 so as to make it clear that value of service portion in execution
of works contract involving transfer of goods and land or undivided share of
land, as the case may be, shall not include value of property in such land or
undivided share of land.
|
4.2%
|
4.2%
|
|
C.
|
Promotion of Regional
Connectivity Scheme of Ministry of
Civil Aviation
|
|||
1.
|
Under the Regional
Connectivity Scheme (RCS), exemption from service tax is being provided in
respect of the amount of viability gap funding (VGF) payable to the airline
operator for providing the services of transport of passengers by air,
embarking from or terminating in a Regional Connectivity Scheme (RCS)
airport, for a period of one year from the date of commencement of operations
of the Regional Connectivity Scheme (RCS) airport as notified by Ministry of
Civil Aviation.
|
14%
|
Nil
|
|
D.
|
Rationalization Measures
|
|||
1.
|
The exemption in respect
of services provided by Indian Institutes of Management (IIMs) by way of two
year full time residential Post Graduate Programmes (PGP) in Management for
the Post Graduate Diploma in Management (PGDM), to which admissions are made
on the basis of the Common Admission Test (CAT), conducted by IIMs, is being
extended to include non-residential programmes.
|
14%
|
Nil
|
|
2.
|
Explanation-I (e) to Rule
6 of CENVAT Credit Rules, 2004 is being amended so as to exclude banks and
financial institutions including non-banking financial companies engaged in
providing services by way of extending deposits, loans or advances from its ambit.
|
|||
3.
|
The Negative List entry in
respect of “services by way of
carrying out any process amounting to manufacture or production of goods
excluding alcoholic liquor for human consumption”, in the Finance Act, 1994,
is proposed to be omitted and instead placed in the exemption notification.
Consequently, clause (40) of section 65B of the Finance Act, which defines ‘process amounting to manufacture’ is
also proposed to be omitted and instead placed in the exemption notification.
|
Nil
|
Nil
|
AMENDMENT IN THE FIRST SCHEDULE TO
THE CUSTOMS TARIFF ACT, 1975
S.
No.
|
Amendment
|
A.
|
Amendments not affecting rates of duty
|
1.
|
The following amendments are being
carried out to:
(i)
Delete tariff items 1302 32 10 and 1302 32 20 and entries relating
thereto and create new tariff items 1106 10 10 and 1106 10 90, in relation to
Guar meal and its products so as to harmonize the Customs Tariff with HS
Nomenclature.
(ii)
Create new tariff item 1511 90 30 for Refined bleached deodorized palm
stearin, so as to harmonize Customs Tariff in accordance with WCO
classification decision.
(iii) Substitute tariff items 3823 11 11 to
3823 11 90 and entries relating thereto with tariff item 3823 11 00.
(iv) Substitute tariff items 3904 10 10 to
3904 22 90 with tariff items 3904 10 10 to 3904 22 00 in relation to the PVC
Resin.
|
2.
|
Chapter Note (4) of Chapter 98 is
being amended so as to remove the non-applicability of headings 9803 and 9804
to goods imported through courier service. Also, heading 9804 is being
amended so as to extend the classification of personal imports by courier,
sea, or land under this heading.
|
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Note: Information placed here in above is only for general perception. This may not reflect the latest status on law and may have changed in recent time. Please seek our professional opinion before applying the provision. Thanks.
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