By Nihal Kothari
The Finance Minister has announced the much awaited government’s commitment to introduce Goods and Service Tax to accelerate economic growth by resolving all pending issues with the States by end of the year. This would be a major tax reform.
In the short term the focus of the Government is to increase Tax: GDP Ratio by widening the tax base. In this context some of the exempted services in the negative list will henceforth be taxable. Excise duty on cigarettes and other tobacco products as well as on aerated waters has been increased significantly.
Inverted customs duty structure has been corrected by reducing /exempting raw materials compared to the duty applicable to the products in which it is used. It will encourage domestic manufacture of such products such as soap making, electronic goods, telecommunication equipment. Duty on import of steel products has been increased to promote domestic manufacture.
The Government has also announced significant legislative changes to reduce tax dispute and their prompt disposals which include making available advance ruling facility to domestic tax payers. Overall the budget proposals are positive but much more is expected in the next Budget in February 2015.”
(The writer is Executive Director at Khaitan & Co)
The Finance Minister has announced the much awaited government’s commitment to introduce Goods and Service Tax to accelerate economic growth by resolving all pending issues with the States by end of the year. This would be a major tax reform.
In the short term the focus of the Government is to increase Tax: GDP Ratio by widening the tax base. In this context some of the exempted services in the negative list will henceforth be taxable. Excise duty on cigarettes and other tobacco products as well as on aerated waters has been increased significantly.
Inverted customs duty structure has been corrected by reducing /exempting raw materials compared to the duty applicable to the products in which it is used. It will encourage domestic manufacture of such products such as soap making, electronic goods, telecommunication equipment. Duty on import of steel products has been increased to promote domestic manufacture.
The Government has also announced significant legislative changes to reduce tax dispute and their prompt disposals which include making available advance ruling facility to domestic tax payers. Overall the budget proposals are positive but much more is expected in the next Budget in February 2015.”
(The writer is Executive Director at Khaitan & Co)
