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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., 5th 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.

  1. 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
  1. Indirect Taxes Highlights and Select Proposals
  2. 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
  1. 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

These  proposals shall come into force on enactment of Finance Bill, 2019 and / or on issuance of Notification, wherever prescribed.

= = = = = = = =

 

By: Dr. Sanjiv Agarwal - July 9, 2019

 

 

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