Home »  Magazine »  Business  » Cover Stories  »  Proposals Pragmatic, Useful

Proposals Pragmatic, Useful

No big move on the indirect taxes front only means the country is set for July 1 GST rollout

Proposals Pragmatic, Useful

Despite a last-minute uncertainty, the finance minister delivered the Union Budget 2017 in parliament as per the advanced date. It was announced with the stated agenda of TEC (Transform, Ene­rgise and Clean) India and based on ten distinct themes including proposals focused around farmers, energising youth, uplifting the poor and under­privileged, stabilisation of financial sectors and digital economy among others.

In line with the customary practice, the industry made a plethora of pre-budget representations covering sector-specific as well as general issues. The industry expectations included rationalisation of inverted duty structure, liberalisation of CENVAT credit rules and announcements of measures to promote ‘Make in India’ initiative.

The current budget seems to have partially met the industry exp­ectations. The Budget seeks to encourage indigenous manufacture of solar panels, LED lights, by affording exemption and concessional rate to certain components for use in manufacture of such products. Also, levy of 2 per cent special additional duty on import of printed circuit boards for mobile phones is in response to industry demand—and is likely to foster domestic manufacturing. However, no incentives for manufacture of IT products such as desktops, laptops and notebooks in India have been extended.

Positive and pragmatic are the decisions to keep the service tax rate unchanged and abolishment of Research and Development Cess (R&D cess) levied in respect of import of technology. Doing away with R&D cess will make the import of technology cheaper for service as well as manufacturing sector and thus complement the ‘Make in India’ campaign. The budget also provides the much-needed push to the ‘Digital India’ scheme by providing excise and customs duty exemptions on POS terminals, scanners and parts thereof.

As for ‘ease of doing business’, an amendment has been brought into the scheme of Advance Rulings, wherein it is proposed to also appoint a retired High Court judge as chairperson of Authority of Advance Ruling (AAR) in addition to a retired Supreme Court judge. This is expected to fast-track disposal of cases pending before AAR. The budget also includes proposals for amending the Customs law, thereby easing the prevalent procedure around import of goods and reducing the time involved in clearance of goods from customs.

The minister re-affirmed the government’s commitment towards the GST rollout as per the scheduled date and also placed the progress card in respect of this tax. He also made a statement that most work around the GST legislative framework has been completed and the GST IT network would be ready as per the schedule.

Thus, with respect to indirect taxes, there have been no significant announcements in the budget in view of the impending GST implementation effective from July 1. All in all, the budget seems to be balanced and without giving any surprises to the ind­ustry, setting the platform for the introduction of the GST.

(The writer is leader, Indirect Tax, BMR & Associates LLP. With inputs from Poonam Harjani and Divya Mahajan.)

Subscribe to Outlook’s Newsletter

Next Story : Towards Wider Direct Tax
Download the Outlook ​Magazines App. Six magazines, wherever you go! Play Store and App Store
Online Casino Betway Banner