There has been no increase in the basic duty rates under customs, central excise and service tax laws, which is a welcome move.
With affirmation on the economic development of the country as against the global slowdown, the Hon’ble Finance Minister (FM) presented his fourth Union Budget for 2017-18. The FM in his speech talked about his agenda to conceptualize the theory of “Transform, Energize and Clean India, that is TEC India” which is evident from two major domestic policy actions in recent past namely demonetization and Swachh Bharat Abhiyan.
The FM has reaffirmed its intentions to roll-out the Goods and Services Tax (GST) soon. Though no definitive timeline was indicated in the speech, the FM indicated that there has been substantial progress towards transitioning to GST.
The preparatory work for this path breaking reform has been a top priority for the Government which has picked up tremendous pace since the enactment of the Constitution Amendment Act, 2016.
Since the passage of Constitution Amendment Act, the GST Council has held nine meetings to discuss various issues relating to GST including broad contours of the rate structure, threshold exemption and parameters for composition scheme, details of compensation to States, cross empowerment of dealers, discussion and acceptance of draft model GST and IGST law. The FM mentioned that extensive reach out efforts to trade and industry for GST will start from April 01, 2017
With GST on the anvil, no major announcements/changes have been proposed on the indirect tax front in the current budget, as there would have been no substantial commensurate benefits.
There has been no increase in the basic duty rates under customs, central excise and service tax laws, which is a welcome move. However, efforts have been done to promote digital economy and cash less transactions such as exemption from BCD, Excise/CV duty and SAD on miniaturized POS card reader for m-POS, micro ATM standard, finger print readers/scanners.
Also, exemption has been provided on parts and components for manufacture of these devices so as to promote make in India. The customs duty rates have been increased/introduced on select products such as SAD of 2% on Populated Printed Circuit Boards (PCBs) for use in manufacture of mobile phones, BCD on RO membrane element for household type filters etc. to provide protection to domestic industry and develop entire ecosystem in India. Certain changes in the customs duty rates have been made to address the issues relating to inverted duty structure.
With inputs from Kishore Kumar and Akshay Goyal.