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Union Budget 2019 had some of the key announcements made on the indirect tax front which was presented on 5th July 2019.
The Government has in the Union Budget 2019 allocated Rs. 350 crore for FY 2019-20 to fund the 2% p.a interest subvention for any fresh or incremental loans applied by GST-registered MSMEs applied on psbloansin59minutes.
Salient features: Eligibility & Procedure:
For further understanding about the process, please read our article on MSMEs get loans up to Rs 1 crore in 59 minutes
“Sabka Vishwas Legacy Dispute Resolution Scheme” will be launched soon to address and close the pending litigations that were raised under the central excise and service tax regime. It will run on a dispute resolution cum amnesty model. FM in the Union Budget 2019 stated that there is more than Rs 3.75 lakh crore blocked in pre-GST tax litigations. The scheme will fasten the legal process involved in certain pre-GST cases on issues that are still ambiguous and pending before the tribunal. Under the scheme, relief is provided in depositing the tax dues ranging from 40%-70% of the tax due under dispute for all cases, other than those disclosed voluntarily. The parties can settle all kinds of excise and service tax disputes, except for the following:
Other benefits include waiver of interest and penalty on full payment of tax dues and not being subject to prosecution.
Basic customs duty on few items were increased for allowing level-playing field for domestic industry. Likewise, duty on few items imported and used as inputs by domestic manufacturers were slashed. Below is an illustration of items where the BCD is hiked prominent ones being gold, silver and precious metals: The items on which BCD is slashed are CRGO sheets, amorphous alloy ribbon, ethylene dichloride, propylene oxide, cobalt matte, naphtha, wool fibres, inputs for the manufacture of artificial kidney and disposable sterilised dialyser, and fuels for nuclear power plants. Customs duty is also being exempted on capital goods required for the manufacture of specified electronic goods. The government is keen to promote the domestic manufacturing of electric vehicles. Hence, certain parts of electric vehicles can be now imported duty-free as the BCD is made exempt. Similarly, to encourage domestic publishing and printing industry, 5 % customs duty is being imposed on imported books. In order to upgrade India’s defence system, import of defence equipment that are not being manufactured in India are being exempted from the basic customs duty.
The Finance Minister has proposed an increase to the special additional duty(SAD) on excise as well as the road and infrastructure cess on petrol and diesel each by a rupee per litre. The FM justified the hike on account of a marginal reduction in the oil prices across the globe. The update can be understood with the below tables:
The announcement leaves uncertainty on whether the Central Government will include petrol under GST in the near-run and in turn do away with the central and state levy of taxes. Other minor rate changes in excise were announced with the tobacco products and crude to now attract a basic excise duty at a nominal rate such as Rs 10 per thousand, 5 per thousand, 0.5%, 1%, Rs 5 paisa per thousand, Rs 10 paisa per thousand depending upon the specifics. The decision was made to address a number of representations received from the industry that despite no basic excise duty, there was a natural calamity and contingent duty being levied on the item.
Retrospective exemptions are given to service tax law as follows:
|Nature of Service||Service provider||Period of exemption|
|Granting a liquor license against a licence fee or application fee.||State Government||1 April 2016- 30 June 2017|
|Educational programmes to students, except Executive Development Programme – (a) 2-year full-time PGD programmes in Management, where admissions are granted based on CAT results, conducted by IIM (b) Fellow programme in Management; (c) 5-year integrated programme in Management.||IIM as per the guidelines of the Central Government||1 July 2003 – 31 March 2016|
|Granting of a long-term lease of 30 years or more on plots for infrastructure for financial business, where consideration is received via an upfront amount.||State Industrial Development Corporations or Undertakings, or by any other entity having 50% or more ownership of Central and State Government, and Union Territory to the developers in any industrial or financial business area||1 October 2013 – 30 June 2017|
To learn all the highlights of the Union Budget 2019 from the direct tax perspective, read our article on Union Budget 2019