Special Analysis on Budget 2013-14: Hotel Industry Impact
Indirect Tax
- No change in Basic Rate of Excise Duty, Service Tax.
- Outside Food becomes costlier. All AC restaurants are subjected to Service Tax, Liquor condition has been removed; previously condition was (Liquor Licence+ AC)
- Service Tax Voluntary Compliance Encouragement Scheme, 2013 announced.
- Scope of Negative List Expanded
- Homes and flats with a carpet area of less than 2,000 sq.ft. or less than value of Rs.1 crore enjoy 75% abatement,
- All Commercial and other residential complexes will be eligible only for 70% abatement.
- Existing exemptions from service tax for low cost housing and single residential units will continue.
- Penalty on Directors / Manager / Secretary / Officer-in-charge in case of violation of Service Tax laws upto Rs.1 Lakh.
- 'Danda Raaj' is back. Service Tax officers will have power to arrest.
- All services liable to service tax should qualify as 'input service' and manufacturer should be allowed to take full CENVAT credit of the same
Direct Tax
- Increase in deduction for housing loan from INR 150,000 to INR 250,000
- Proposes surcharge of 10 pct on rich taxpayers with annual income of more than 10 million rupees a year
- To increase surcharge to 10 pct on domestic companies with annual income of more than 100 million rupees
- Tax rate not to be changed (except for increase in minimum threshold limit for individuals)
- Reduce MAT rate for infrastructure companies and SEZ developers/units;
- Broaden the tax base by requiring the mandatory filing for specified transaction or extending the presumptive tax regime
- Omit the retrospective amendments relating to royalty and indirect transfer introduced by last year budget
Regards,
Savan R. Somani
Corporate Manager Taxation
CAclubindia
