INDIRECT TAXES IN UNION BUDGET 2019-20

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INDIRECT TAXES IN UNION BUDGET 2019-20

				By: Dr. Sanjiv Agarwal
				July 9, 2019
All Articles by: Dr. Sanjiv Agarwal View Profile

Contents

The Union Budget for the year 2019-20, as laid in the Parliament today (i.e., 5^th July, 2019) is the first Budget of the new Union Government and so for the Union Finance Minister, a woman. While the Budget promises a host of plans, welfare schemes and developmental activities, here is a snap shot of the of the Indian economy and Budget offerings in terms of indirect taxation and directions for the economy in the backdrop of economic slowdown.

Economic Highlights and Select Proposals

Economic survey suggest economic growth with macro-economic stability
India is now the 6th largest economy in the world, compared to 11th largest economy in 2014.
Indian economy is globally the 3rd largest in Purchasing Power Parity (PPP) terms
Indian economy to become a 3 trillion dollar economy in the current year, aspiring to be a 5 trillion dollar economy
Fiscal deficit in FY19 at 3.3% of the GDP
Building Team India with Jan Bhagidari: Minimum Government Maximum Governance.
Common man’s life changed through MUDRA loans for ease of doing business.
Various measures related to MSMEs announced like Pradhan Mantri Karam Yogi Maandhan Scheme, Interest Subvention Scheme for MSMEs, Payment platform for MSMEs
Measures to make India a more attractive FDI destination.
GDP predicted @7% for financial year 2019-20
Focus on private investment and infrastructure
Industrial production and service sector growth not encouraging
Labour laws reforms to be prioritized
Life expectancy increases and ought to be addressed
Starts up econ system to be liberalized to encourage entrepreneurship

Indirect Taxes Highlights and Select Proposals
Customs , Service Tax and Central Excise

Import duty on gold & precious metals increased to 12.5% from 10%.
Import of Defence equipment not manufactured in India exempt from Customs Duty
5% Basic Custom Duty imposed on imported books.
Customs duty reduced on certain raw materials, like Inputs for artificial kidney, Capital goods required for manufacture of specified electronic goods, etc
Increase in Special Additional Excise Duty and Road and Infrastructure Cess each by ₹ 1 per litre on petrol and diesel
Legacy Dispute Resolution Scheme, 2019 for quick closure of pending litigations in Central Excise and Service tax from pre-GST regime
Service Tax (provisions shall apply retrospectively):

No service tax shall be levied or collected in respect of taxable service provided or agreed to be provided by the State Government by way of grant of liquor licence, against consideration in the form of licence fee or application fee, by whatever name called, during the period commencing from the 01.04.2016 to 30.06.2017.
Refund of tax already collected but which would not have been so collected shall be given and application for the claim of such refund shall be made within a period of 6 months from the date on which the Finance (No.2) Bill, 2019 receives the assent of the President.
Special provision for retrospective exemption from service tax in certain cases relating to services provided by Indian Institutes of Management to students for period 1st July, 2003 to 31st March, 2016.
Special provision for retrospective exemption from service tax in certain cases relating to long term lease of plots for development of infrastructure for financial business for 1st October, 2013 to 30th June, 2017

Goods and Service Tax (GST)

Acknowledges GST as a monumental tax reform in country
Praises cooperative federalism and efforts of GST Council
Admits teething problems in GST implementation, but considers it to be natural, looking to the scale of reform.
Stress on further simplification of GST processes, including simplified single return and e-invoice system.

GST revised collection for financial year 2018-2019 Rs. 643900 crores

Budget estimate for GST collection for financial year 2019-2020 ₹ 663343 crores

Changes in GST law

Changes proposed in CGST / IGST / UGST tax laws:

CGST

Insertion of new Section	Relating to
31A	Facility of digital payment to recipient
53A	Transfer of certain amounts
101A	Constitution of National Appellate Authority for advance ruling and AAAR
101B	Appeal to National Appellate Authority
101C	Order of National Appellate Authority

IGST

Insertion of new Section	Relating to
17A	Transfer of certain amounts by Government to State / Union Territory
103A	Retrospective Exemption in relation to Uranium Ore Concentrate

UGST

Insertion of new Section	Relating to
103A	Retrospective Exemption in relation to Uranium Ore Concentrate

Amendment in CGST Law

*Section*	*Amendment*
2	Adjudicating Authority to exclude National Appellate Authority
10	Alternative composition scheme for supplier of services or mixed suppliers
22	Higher threshold exemption for supplier of goods upto ₹ 40lakhs
25	Mandatory use of Aadhaar for taking GST registration
39	Quarterly payment / furnishing of annual return by composition suppliers
44	Commissioner empowered to extend date of furnishing annual return
49	Facility to transfer amount from one head to another in e-cash ledger
50	Providing for charging interaction net cash tax liability
52	Commissioner empowered to extend the date of furnishing TCS return
54	Central Government empowered to refund State tax to taxpayers
95	Seeking advance ruling from National Appellate Authority for Advance Ruling
102	National Appellate Authority empowered to rectify Advance Ruling
103	Ruling of National Appellate Authority to be binding to all persons having same PAN
104	National Appellate Authority Ruling to be void if obtained through fraud, suppression etc
105	National Appellate Authority to have powers of civil court under CCP, 1908
106	National Appellate Authority to regulate its own procedures
168	Commissioner to exercise power u/s 44 & 52 with approval of CBIC
171	National Anti-Profiteering Authority empowered to impose penalty @10% of profiteered amount