On the Direct Tax side, goods concessions were announced for Individuals- the new rate of taxes shall be exempted till income of 1.6 lakhs, 10% upto 5 lakhs, 20% from 5 to 8 lakhs and 30% above 8 lakhs. Further additional tax deduction of 20K was announced on investment in long term infrastructure bonds. For corporates the surcharge was reduced from 10 to 7.5%. Minimum Alternate Tax (MAT) has been increased from 15 to 18%.
Weighted reduction on inhouse research expenditure has been increased from 150% to 200%. Investment linked deduction extended to hotels sector. To reduce compliance cost on small tax payers, the limit if tax audit for small businesses has been increased from 40 to 60 lakhs and professionals from 10 to 15 lakhs. A provision of TDS has been simplified.
On indirect tax side, benchmark rate for Central Excise duty has been increased from 8% to 10%. A further tax has been increased on petroleum products, automobiles, cigarettes and tobacco products, cement etc. Compounded levy scheme is being extended to chewing tobacco. A clean energy cess of Rs. 50 per ton has been imposed on coal. Some duty concession has been extended to energy efficient products like CFL, LED, rotors for wind power generation, solar energy generation equipments, supary, some planataion equipments, specified storage and preservation equipments, security ink, corrugated boxed, latex threads etc. Mosquito nets impregnated with insecticide, AV Gas, Computer parts (other than mother board) shall attract duty of 4% from present nil. Sunglasses, baby diapers and napkins will also attract central excise duty of 10%. Refined gold bar will attract specific central excise duty of Rs. 280 per 10 grams.
Procedural simplification has been done for small scale sector like quarterly payment of duty, 100% capital goods credit in the first year. Scope of settlement commission has been expanded. It has been clarified that no penalty will be imposed if duty is paid under Section 11A(2B) of the Central Excise Act.
Basic custom duty has been imposed on crude and petroleum products. The rate of custom duty on precious metals, like gold, silver etc. has been increased. Outright exemption from SAD has been extended to products imported for sale in India. Definition of project import has been expanded.
Rate of service tax has remained unchanged.
Service Tax has been imposed on following services
1. Services of promoting, marketing and organisising of games of chance, including lottery;
2. Specified health services when payment is made by business entity or insurance company;
3. Maintenance of medical record.
4. Services related to promotion of brand.
5. Commercial use of any event.
6. Electricity exchange
7. Copyright related to cinematographic film and sound recording.
8. Special services provided by builders.
The scope of following services has been expanded:
1. Sponsorship services, which will now include sports events.
2. Air passenger Transport Service, to include domestic journey and international journey of any class.
3. Information Technology services, even when provided to individuals.
4. Commercial Coaching & Training services, to include any consideration even when there is no profit motive.
5. Construction of complex service.
6. Renting has been defined a service.
7. Value of management of investment under ULIP services has been increased.
The changes in service tax far more exhaustive.
Advocate Rajesh Kumar