Indirect tax proposals FM made to revive the economy

FULL COVERAGE: Union Budget 1. Standard rate of Basic Excise Duty maintained at 12%
2. Increase in rate of duty on:
3. Writing or printing paper for printing of educational textbooks
4. Recorded smart cards
5. Pan masala, tobacco related products and motor spirit

Decrease in rate of duty on:

1. Gloves specifically designed for use in sports to 2%, subject to conditions specified
2. Branded Petrol
3. Footware of retail sale price between Rs.500 to Rs.1000
4. LED lights and fixtures and LED lamps

Other compliance:

1. E-payment has been made mandatory for all assesses. Prior permission from the authorities required for payment under other modes.
2. Default in payment of duty would attract penalty of 1% provided the assessee pays on their own

Customs
Increase in rate of duty on:

1. Certain electronic goods
2. Telecommunication products like soft switches, optical transport equipments, IP radios, carrier ethernet switches etc.

Decrease in rate of duty on:
2. Personal Computers (laptops/desktops), tablet computers and smart card would be cheaper has there has been a reduction of duty on import of input for the manufacture of these goods

Baggage allowance has been increased from Rs 35,000 to Rs 45000
Service tax
Service tax rate retained at 12%

Widening of service tax base:
1. Selling of space or time for advertisements in any manner including online and mobile advertising segments is now taxable.
2. Service provided by Radio-taxis or Radio-cabs taxable.
3. Air conditioned contract carriage for transport of passenger
4. Auxiliary educational services other than specified services like catering, transportation, security etc.
5. Renting of immovable property to educational institutions
6. Accommodation services provided by hotels, dharamshalas or ashrams ( whether commercial and noncommercial) when they provide rooms for more than Rs.1,000  per day

BUDGET SPEECH: Full text | Video

New exemptions introduced:
1. Service provided by Employees' State Insurance Corporation (ESIC)
2. Loading, unloading, packing, storage or warehousing, transport by vessel, rail or road of cotton, ginned or baled
3. Life micro-insurance schemes for the poor, approved by IRDA, where sum assured does not exceed Rs 50,000

 Service tax to be paid by the service recipient in the case of recovery agent Banks, Financial Institutions and NBFC

Other compliance
1. Time limit has been prescribed for speedy completion of adjudications
2. Point of taxation  for reverse charge payments shall be the  date of payment or 1st day after three months from the invoice ; whichever is earlier
3. Interest on delayed payments of service tax has been increased from 18% to deferred payment from 18% (within 6 months) to  24% (6 months to 12 months) and 30% (more than one year)
Certain provisions which has been introduced in Central Excise, Customs and Service tax

A mandatory fixed pre-deposit of 7.5% of the duty demanded or penalty imposed or both for filing appeal with the Commissioner (Appeals) or the Tribunal at the first stage and 10% of the duty demanded or penalty imposed or both for filing second stage appeal before the Tribunal. The amount of pre-deposit payable would be subject to a ceiling of Rs. 10 crore.

Seema Zacharia, Senior Manager, Deloitte Touche Tohmatsu India Private Limited

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