Key points of Indirect Tax of Union Budget 2019 -20

Key points of Indirect Tax of Union Budget 2019 -20.

Indirect Taxes

Make In India

  • Basic Customs Duty increased on cashew kernels, PVC, tiles, auto parts, marble slabs, optical fibre cable, CCTV camera etc.
  • Exemptions from Customs Duty on certain electronic items now manufactured in India withdrawn.
  • End use-based exemptions on palm stearin, fatty oils withdrew.
  • Exemptions to various kinds of papers withdrawn.
  • 5% Basic Customs Duty imposed on imported books.
  • Customs duty reduced on certain raw materials such as:
    • Inputs for artificial kidney and disposable sterilised dialyser and fuels for nuclear power plants etc.
    • Capital goods required for the manufacture of specified electronic goods.

Defence

  • Defence equipment not manufactured in India exempted from basic customs duty

Other Indirect Tax provisions

  • Export duty rationalised on raw and semi-finished leather
  • Increase in Special Additional Excise Duty and Road and Infrastructure Cess each by Rs. 1 per litre on petrol and diesel
  • Customs duty on gold and other precious metals increased
  • Legacy Dispute Resolution Scheme for quick closure of pending litigations in Central Excise and Service tax from the pre-GST regime

Grameen Bharat / Rural India

  • UjjwalaYojana and Saubhagya Yojana have transformed the lives of every rural family, dramatically improving the ease of their living.
  • Electricity and clean cooking facility to all willing rural families by 2022.
  • Pradhan Mantri Awas Yojana – Gramin(PMAY-G) aims to achieve “Housing for All” by 2022:
    • Eligible beneficiaries to be provided 1.95 crore houses with amenities like toilets, electricity and LPG connections during its second phase (2019-20 to 2021-22).
  • Pradhan Mantri Matsya Sampada Yojana (PMMSY)
    • A robust fisheries management framework through PMMSY to be established by the Department of Fisheries.
    • To address critical gaps in the value chain including infrastructure, modernization, traceability, production, productivity, post-harvest management, and quality control.
  • Pradhan Mantri Gram Sadak Yojana (PMGSY)
    • The target of connecting the eligible and feasible habitations advanced from 2022 to 2019 with 97% of such habitations already being provided with all-weather connectivity.
    • 30,000 kilometres of PMGSY roads have been built using Green Technology, Waste Plastic and Cold Mix Technology, thereby reducing carbon footprint.
    • 1,25,000 kilometres of road length to be upgraded over the next five years under PMGSY III with an estimated cost of Rs. 80,250 crore.
  • Scheme of Fund for Upgradation and Regeneration of Traditional Industries’ (SFURTI)
    • Common Facility Centres (CFCs) to be set up to facilitate cluster-based development for making traditional industries more productive, profitable and capable of generating sustained employment opportunities.
    • 100 new clusters to be set up during 2019-20 with special focus on Bamboo, Honey and Khadi, enabling 50,000 artisans to join the economic value chain.
  • Scheme for Promotion of Innovation, Rural Industry and Entrepreneurship’ (ASPIRE) 
    • 80 Livelihood Business Incubators (LBIs) and 20 Technology Business Incubators (TBIs) to be set up in 2019-20.
    • 75,000 entrepreneurs to be skilled in agro-rural industry sectors.
  • Private entrepreneurship to be supported in driving value-addition to farmers’ produce from the field and for those from allied activities.
  • Dairying through cooperatives to be encouraged by creating infrastructure for cattle feed manufacturing, milk procurement, processing & marketing.
  • 10,000 new Farmer Producer Organizations to be formed, to ensure economies of scale for farmers.
  • Government to work with State Governments to allow farmers to benefit from e-NAM.
  • Zero Budget Farming which few states’ farmers are already being trained to be replicated in other states.
  • India’s water security
    • New Jal Shakti Mantralaya to look at the management of our water resources and water supply in an integrated and holistic manner
    • Jal Jeevan Mission to achieve Har Ghar Jal (piped water supply) to all rural households by 2024
    • To focus on integrated demand and supply-side management of water at the local level.
    • Convergence with other Central and State Government Schemes to achieve its objectives.
    • 1592 critical and overexploited Blocks spread across 256 District being identified for the Jal Shakti Abhiyan.
    • Compensatory Afforestation Fund Management and Planning Authority (CAMPA) fund can be used for this purpose.
  • Swachh Bharat Abhiyan
    • 6 crore toilets constructed since Oct 2, 2014.
    • More than 5.6 lakh villages have become Open Defecation Free (ODF).
    • Swachh Bharat Mission to be expanded to undertake sustainable solid waste management in every village.
  • Pradhan Mantri Gramin Digital Saksharta Abhiyan,
    • Over two crore rural Indians made digitally literate.
    • Internet connectivity in local bodies in every Panchayat under Bharat-Net to bridge the rural-urban divide.
    • Universal Obligation Fund under a PPP arrangement to be utilized for speeding up Bharat-Net.

Shahree Bharat/Urban India

  • Pradhan Mantri Awas Yojana – Urban (PMAY-Urban)-
    • Over 81 lakh houses with an investment of about Rs. 4.83 lakh crore sanctioned of which construction started in about 47 lakh houses.
    • Over 26 lakh houses completed of which nearly 24 lakh houses delivered to the beneficiaries.
    • Over 13 lakh houses so far constructed using new technologies.
  • More than 95% of cities also declared Open Defecation Free (ODF).
  • Almost 1 crore citizens have downloaded Swachhata App.
  • The target of achieving Gandhiji’s resolve of Swachh Bharat to make India ODF by 2nd October 2019.
    • To mark this occasion, the Rashtriya Swachhta Kendra to be inaugurated at Gandhi Darshan, Rajghat on 2nd October 2019.
    • Gandhipedia being developed by National Council for Science Museums to sensitize youth and society about positive Gandhian values.
  • Railways to be encouraged to invest more in suburban railways through SPV structures like Rapid Regional Transport System (RRTS) proposed on the Delhi-Meerut route.
  • Proposal to enhance the metro-railway initiatives by:
    • Encouraging more PPP initiatives.
    • Ensuring completion of sanctioned works.
    • Supporting transit-oriented development (TOD) to ensure commercial activity around transit hubs.

Youth

  • New National Education Policy to be brought which proposes
    • Major changes in both school and higher education
    • Better Governance systems
    • Greater focus on research and innovation.
  • National Research Foundation (NRF) proposed
    • To fund, coordinate and promote research in the country.
    • To assimilate independent research grants given by various Ministries.
    • To strengthen overall research eco-system in the country
    • This would be adequately supplemented with additional funds.
  • 400 crore provided for “World Class Institutions”, for FY 2019-20, more than three times the revised estimates for the previous year.
  • ‘Study in India proposed to bring foreign students to study in Indian higher educational institutions.
  • Regulatory systems of higher education to be reformed comprehensively:
    • To promote greater autonomy.
    • To focus on better academic outcomes.
  • Draft legislation to set up the Higher Education Commission of India (HECI), to be presented.
  • Khelo India Scheme is expanded with all necessary financial support.
  • National Sports Education Board for development of sportspersons to be set up under Khelo India, to popularize sports at all levels
  • To prepare youth for overseas jobs, focus to be increased on globally valued skill-sets including language training, AI, IoT, Big Data, 3D Printing, Virtual Reality and Robotics.
  • Set of four labour codes proposed, to streamline multiple labour laws to standardize and streamline registration and filing of returns.
  • A television program proposed exclusively for and by start-ups, within the DD bouquet of channels.
  • Stand-Up India Scheme to be continued for the period of 2020-25. The Banks to provide financial assistance for demand-based businesses.

Ease of Living

  • About 30 lakh workers joined the Pradhan Mantri Shram Yogi Maandhan Scheme that provides Rs. 3,000 per month as pension on attaining the age of 60 to workers in unorganized and informal sectors.
  • Approximately 35 crores LED bulbs distributed under UJALA Yojanaleading to cost saving of Rs. 18,341 crore annually.
  • Solar stoves and battery chargers to be promoted using the approach of LED bulbs mission.
  • A massive program of railway station modernization to be launched.

Naari Tu Narayani/Women

  • Approach shift from women-centric-policy making to women-led initiatives and movements.
  • A Committee proposed with Government and private stakeholders for moving forward on Gender budgeting.
  • SHG:
    • Women SHG interest subvention program proposed to be expanded to all districts.
    • Overdraft of Rs. 5,000 to be allowed for every verified woman SHG member having a Jan Dhan Bank Account.
    • One woman per SHG to be eligible for a loan up to Rs. 1 lakh under MUDRA Scheme.

India’s Soft Power

  • Proposal to consider issuing Aadhaar Card for NRIs with Indian Passports on their arrival without waiting for 180 days.
  • Mission to integrate traditional artisans with global markets proposed, with necessary patents and geographical indicators.
  • 18 new Indian diplomatic Missions in Africa approved in March 2018, out of which 5 already opened. Another 4 new Embassies intended in 2019-20.
  • Revamp of Indian Development Assistance Scheme (IDEAS) proposed.
  • 17 iconic Tourism Sites being developed into model world-class tourist destinations.
  • Present digital repository aimed at preserving rich tribal cultural heritage, to be strengthened.

Banking and Financial Sector

  • NPAs of commercial banks reduced by over Rs. 1 lakh crore over the last year.
  • Record recovery of over Rs. 4 lakh crore effected over the last four years.
  • Provision coverage ratio at its highest in seven years.
  • Domestic credit growth increased to 13.8%.
  • Measures related to PSBs:
    • 70,000 crore proposed to be provided to PSBs to boost credit.
    • PSBs to leverage technology, offering online personal loans and doorstep banking, and enabling customers of one PSBs to access services across all PSBs.
    • Steps to be initiated to empower accountholders to have control over the deposit of cash by others in their accounts.
    • Reforms to be undertaken to strengthen governance in PSBs.
  • Measures related to NBFCs:
    • Proposals for strengthening the regulatory authority of RBI over NBFCs to be placed in the Finance Bill.
    • The requirement of creating a Debenture Redemption Reserve will be done away with to allow NBFCs to raise funds in public issues.
    • Steps to allow all NBFCs to directly participate on the TReDS platform.
  • Return of regulatory authority from NHB to RBI proposed, over the housing finance sector.
  • 100 lakh crore investment in infrastructure intended over the next five years. Committee proposed to recommend the structure and required the flow of funds through development finance institutions.
  • Steps to be taken to separate the NPS Trust from PFRDA.
  • Reduction in Net Owned Fund requirement from Rs. 5,000 crore to Rs. 1,000 crore  proposed:
    • To facilitate the on-shoring of international insurance transactions.
    • To enable the opening of branches by foreign reinsurers in the International Financial Services Centre.
  • Measures related to CPSEs:
    • The target of Rs. 1, 05,000 crores of disinvestment receipts set for the FY 2019-20.
    • Government to reinitiate the process of strategic disinvestment of Air India, and to offer more CPSEs for strategic participation by the private sector.
    • Government to undertake the strategic sale of PSUs and continue to consolidate PSUs in the non-financial space.
    • Government to consider going to an appropriate level below 51% in PSUs where the government control is still to be retained, on case to case basis.
    • The present policy of retaining 51% Government stake to be modified to retaining 51% stake inclusive of the stake of Government controlled institutions.
    • Retail participation in CPSEs to be encouraged.
    • To provide additional investment space:
  • Government to realign its holding in CPSEs
  • Banks to permit greater availability of its shares and to improve the depth of its market.
    • Government to offer an investment option in ETFs on the lines of Equity Linked Savings Scheme (ELSS).
    • Government to meet public shareholding norms of 25% for all listed PSUs and raise the foreign shareholding limits to maximum permissible sector limits for all PSU companies which are part of Emerging Market Index.
  • Government to raise a part of its gross borrowing program in external markets in external currencies. This will also have a beneficial impact on the demand situation for government securities in the domestic market.
  • New series of coins of One Rupee, Two Rupees, Five Rupees, Ten Rupees and Twenty Rupees, easily identifiable to the visually impaired to be made available for public use shortly.

Digital Payments

  • TDS of 2% on cash withdrawal exceeding Rs. 1 crore in a year from a bank account
  • Business establishments with an annual turnover of more than Rs. 50 crore shall offer low-cost digital modes of payment to their customers and no charges or Merchant Discount Rate shall be imposed on customers as well as merchants.

Mega Investment in Sunrise and Advanced Technology Areas

  • Scheme to invite global companies to set up mega-manufacturing plants in areas such as Semi-conductor Fabrication  (FAB), Solar Photo Voltaic cells, Lithium storage batteries, Computer Servers, Laptops, etc
    • Investment-linked income tax exemptions to be provided along with indirect tax benefits.

Achievements during 2014-19

  • 1 trillion dollars added to the Indian economy over the last 5 years (compared to over 55 years taken to reach the first trillion dollars).
  • India is now the 6thlargest economy in the world, compared to 11th largest five years ago.
  • Indian economy is globally the 3rdlargest in Purchasing Power Parity (PPP) terms.
  • Strident commitment to fiscal discipline and a rejuvenated Centre-State dynamic provided during 2014-19.
  • Structural reforms in indirect taxation, bankruptcy and real estate carried out.
  • The average amount spent on food security per year almost doubled during 2014-19 compared to 2009-14.
  • Patents issued more than trebled in 2017-18 as against the number in 2014.
  • Ball set rolling for a New India, planned and assisted by the NITI Aayog.

Roadmap for future

  • Simplification of procedures.
  • Incentivizing performance.
  • Red-tape reduction.
  • Making the best use of technology.
  • Accelerating mega programmes and services initiated and delivered so far.

 

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