Budget 2017-18 : Economic reforms and indirect taxes

Union Budget 2017-18 proposals have been presented under the following ten distinct themes to foster the socio-economic agenda:

• Farmers : for whom we have committed to double the income in 5 years;
• Rural Population: providing employment and basic infrastructure;
• Youth : energising them through education, skills and jobs;
• 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 and stability through 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; and
• Tax Administration: honouring the honest.

The tax proposals, both direct and indirect, are aimed at the following major reform areas:

• Measures for Promoting Affordable Housing and Real Estate Sector
• Measures for Stimulating Growth
• Promoting Digital Economy
• Transparency in Electoral Funding
• Ease of Doing Business
• Personal Income-Tax
• Goods and Services Tax
• RAPID(Revenue, Accountability, Probity, Information and Digitalisation)

‘Key Highlights of Union Budget 2017-18’ relating to Economic Reforms

• GDP to grow @ 6.75 – 7.5 percent in 2017-18
• Tax to GDP ratio too low
• Inflation brought under control. CPI-based inflation declined from 6% in July 2016 to 3.4% in December, 2016.
• 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.
• India has become the sixth largest manufacturing country in the world
• India is expected to be one of the fastest growing major economies in 2017

‘Key Highlights of Union Budget 2017-18’ relating to Indirect Tax (Except Service Tax)

Customs Duty

No major changes have been proposed in customs law (except changes in duty structure).

Excise Duty

• 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.
• Notification No.12/2012-Central Excise dated 17.03.2012 [S.No.128, which prescribed a concessional excise duty of 1% subject to certain conditions] is being amended so as to exclude goods falling under heading 3101 from the purview of the said entry.
• Excise duty is being exempted on Catalyst [3815 90 00] and Resin [3909 40 90] for use in the manufacture of cast components of Wind Operated Electricity Generator subject to actual user condition. The exemption from excise duty will be valid till 30th June, 2017.
• Nil excise duty, on waste and scrap of precious metals or metals clad with precious metals, arising in course of manufacture of goods, is being made subject to condition that no credit of input or input services or capital goods has been availed by manufacturers of such goods.
• Nil excise duty, on strips, wires, sheets, plates and foils of silver, is being made subject to condition that no credit of input or input services or capital goods has been availed by manufacturers of such goods.
• Nil excise duty, on Silver coins of purity 99.9% above, bearing a brand name, is being made subject to condition that no credit of input or input services or capital goods has been availed by manufacturers of such goods.
• Point of Sale [POS] devices and all goods for manufacture of POS devices subject to actual user condition were exempted from central excise / CV duty Vide Notification No.35/2016-Central Excise, dated 28th November, 2016. These exemptions which are valid till 31st March 2017 are being extended up to 30.06.2017.

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