Key Features
of Budget 2010-2011
CHALLENGES
°
To quickly
revert to the high GDP growth path of 9 per cent and then find the means to cross
the double digit growth barrier.
°
To harness
economic growth to consolidate the recent gains in making development more inclusive.
°
To address
the weaknesses in government systems, structures and institutions at different levels
of governance.
OVERVIEW
OF THE ECONOMY
°
India
among the first few countries in the world to implement a broad-based counter-cyclic
policy package to respond to the negative fallout of the global slowdown.
°
The Advance
Estimates for Gross Domestic Product (GDP) growth for 2009-10 pegged at 7.2 per
cent. The final figure expected to be higher when the third and fourth quarter GDP
estimates for 2009-10 become available.
°
The growth
rate in manufacturing sector in December 2009 was 18.5 per cent the highest in
the past two decades.
°
A major
concern during the second half of 2009-10 has been the emergence of double digit
food inflation. Government has set in motion steps, in consultation with the State
Chief Ministers, which should bring down the inflation in the next few months and
ensure that there is better management of food security in the
country.
CONSOLIDATING
GROWTH
Fiscal
Consolidation
°
With
recovery taking root, there is a need to review public spending, mobilize resources
and gear them towards building the productivity of the economy.
°
Fiscal
policy shaped with reference to the recommendations of the Thirteenth Finance
Commission, which has recommended a calibrated exit strategy from the expansionary
fiscal stance of last two years.
°
It would
be for the first time that the Government would target an explicit reduction
in its
domestic public debt-GDP ratio.
Tax reforms
°
On the
Direct Tax Code (DTC) the wide-ranging discussions with stakeholders have been concluded
Government will be in a position to implement the DTC from April 1, 2011.
°
Centre
actively engaged with the Empowered Committee of State Finance Ministers to finalise
the structure of Goods and Services Tax (GST) as well as the modalities of its expeditious
implementation. Endeavour to introduce GST by April, 2011
Peoples
ownership of PSUs
°
Ownership
has been broad based in Oil India Limited, NHPC, NTPC and Rural Electrification
Corporation while the process is on for National Mineral Development Corporation
and Satluj Jal Vidyut Nigam. This will raise about Rs 25,000 crore during the current
year.
°
Higher
amount proposed to be raised during the year 2010-11.
Fertiliser
subsidy
°
A Nutrient
Based Subsidy policy for the fertiliser sector has been approved by the Government
and will become effective from April 1, 2010.
°
This
will lead to an increase in agricultural productivity and better returns for the
farmers, and overtime reduce the volatility in demand for fertiliser subsidy and
contain the subsidy bill.
Petroleum
and Diesel pricing policy
°
Expert
Group to advise the Government on a viable and sustainable system of pricing of
petroleum products has submitted its recommendations.
°
Decision
on these recommendations will be taken in due course.
Improving
Investment Environment
Foreign
Direct Investment
°
Number
of steps taken to simplify the FDI regime.
°
Methodology
for calculation of indirect foreign investment in Indian companies has been clearly
defined.
°
Complete
liberalisation of pricing and payment of technology transfer fee and trademark,
brand name and royalty payments.
Financial
Stability and Development Council
°
An apex
level Financial Stability and Development Council to be set up with a view to strengthen
and institutionalise the mechanism for maintaining financial stability.
°
This
Council would monitor macro-prudential supervision of the economy, including the
functioning of large financial conglomerates, and address interregulatory coordination
issues.
Banking
Licences
°
RBI is
considering giving some additional banking licenses to private sector players. Non
Banking Financial Companies could also be considered, if they meet the RBIs eligibility
criteria.
Public
Sector Bank Capitalisation
°
Rs.16,500
crore provided to ensure that the Public Sector Banks are able to attain a minimum
8 per cent Tier-I capital by March 31, 2011.
Recapitalisation
of Regional Rural Banks (RRB)
°
Government
to provide further capital to strengthen the RRBs so that they have adequate capital
base to support increased lending to the rural economy.
Corporate
Governance
°
Government
has introduced the Companies Bill, 2009 in the Parliament to replace the existing
Companies Act, 1956, which will address issues related to regulation in corporate
sector in the context of the changing business environment.
Exports
°
Extension
of existing interest subvention of 2 per cent for one more year for exports covering
handicrafts, carpets, handlooms and small and medium enterprises.
Agriculture
Growth
°
Government
will follow a four-pronged strategy, covering
(a) Agricultural
production
°
Rs. 400
crore provided to extend the green revolution to the eastern region of the country
comprising Bihar, Chattisgarh, Jharkhand, Eastern UP, West Bengal and Orissa.
°
Rs. 300
crore provided to organise 60,000 pulses and oil seed villages in rain-fed areas
during 2010-11 and provide an integrated intervention for water harvesting, watershed
management and soil health, to enhance the productivity of the dry land farming
areas.
°
Rs. 200
crore provided for sustaining the gains already made in the green revolution areas
through conservation farming, which involves concurrent attention to soil health,
water conservation and preservation of biodiversity.
(b) Reduction
in wastage of produce
°
Government
to address the issue of opening up of retail trade. It will help in bringing down
the considerable difference between farm gate, wholesale and retail prices.
°
Deficit
in the storage capacity met through an ongoing scheme for private sector participation
FCI to hire godowns from private parties for a guaranteed period of 7 years.
(c) Credit
support to farmers
°
Banks
have been consistently meeting the targets set for agriculture credit flow in the
past few years. For the year 2010-11, the target has been set at Rs.3,75,000 crore.
°
In view
of the recent drought in some States and the severe floods in some other parts of
the country, the period for repayment of the loan amount by farmers extended by six
months from December 31, 2009 to June 30, 2010 under the Debt Waiver and Debt Relief
Scheme for Farmers.
°
Incentive
of additional one per cent interest subvention to farmers who repay short-term
crop loans as per schedule, increased to 2% for 2010-11.
(d) Impetus
to the food processing sector
°
In addition
to the ten mega food park projects already being set up, the Government has decided
to set up five more such parks.
°
External
Commercial Borrowings to be available for cold storage or cold room facility, including
for farm level pre-cooling, for preservation or storage of agricultural and allied
produce, marine products and meat.
Infrastructure
°
Rs 1,73,552
crore provided for infrastructure development which accounts for over 46 per cent
of the total plan allocation.
°
Allocation
for road transport increased by over 13 per cent from Rs. 17,520 crore to Rs 19,894
crore.
°
Rs 16,752
crore provided for Railways, which is about Rs.950 crore more than last year.
India
Infrastructure Finance Company Limited (IIFCL)
°
IIFCLs
disbursements are expected to touch Rs 9,000 crore by end March 2010 and reach around
Rs 20,000 crore by March 2011.
°
IIFCL
has refinanced bank lending to infrastructure projects of Rs. 3,000 crore during
the current year and is expected to more than double that amount in 2010-11.
°
The take-out
financing scheme announced in the last Budget is expected to initially provide finance
for about Rs. 25,000 crore in the next three years.
Energy
°
Plan
allocation for power sector excluding RGGVY doubled from Rs.2230 crore in 2009-10
to Rs.5,130 crore in 2010-11.
°
Government
proposes to introduce a competitive bidding process for allocating coal blocks for
captive mining to ensure greater transparency and increased participation in production
from these blocks.
°
A Coal
Regulatory Authority to create a level playing field in the coal sector proposed
to be set up.
°
Plan
outlay for the Ministry of New and Renewable Energy increased by 61 per cent from
Rs.620 crore in 2009-10 to Rs.1,000 crore in 2010-11.
°
Solar,
small hydro and micro power projects at a cost of about Rs.500 crore to be set up
in Ladakh region of Jammu and Kashmir.
Environment
and Climate change
°
National
Clean Energy Fund for funding research and innovative projects in clean energy technologies
to be established.
°
One-time
grant of Rs.200 crore to the Government of Tamil Nadu towards the cost of installation
of a zero liquid discharge system at Tirupur to sustain knitwear industry.
°
Rs.200
crore provided as a Special Golden Jubilee package for Goa to preserve the natural
resources of the State, including sea beaches and forest cover.
°
Allocation
for National Ganga River Basin Authority (NGRBA) doubled in 2010-11 to Rs.500 crore.
°
Schemes
on bank protection works along river Bhagirathi and river Ganga-Padma in parts of
Murshidabad and Nadia district of West Bengal included in the Centrally Sponsored
Flood Management Programme.
°
A project
at Sagar Island to be developed to provide an alternate port facility in West Bengal.
INCLUSIVE
DEVELOPMENT
°
The spending
on social sector has been gradually increased to Rs.1,37,674 crore in 2010-11, which
is 37% of the total plan outlay in 2010-11.
°
Another
25 per cent of the plan allocations are devoted to the development of rural infrastructure.
Education
°
Plan
allocation for school education increased by 16 per cent from Rs.26,800 crore in
2009-10 to Rs.31,036 crore in 2010-11.
°
In addition,
States will have access to Rs.3,675 crore for elementary education under the Thirteenth
Finance Commission grants for 2010-11.
Health
°
An Annual
Health Survey to prepare the District Health Profile of all Districts shall be conducted
in 2010-11.
° Plan allocation to Ministry of Health & Family Welfare increased from Rs 19,534 crore in 2009-10 to Rs 22,300 crore for 2010-11.
Financial
Inclusion
°
Appropriate
Banking facilities to be provided to habitations having population in excess of
2000 by March, 2012.
°
Insurance
and other services to be provided using the Business Correspondent model.
By this
arrangement, it is proposed to cover 60,000 habitations.
°
Augmentation
of Rs.100 crore each for the Financial Inclusion Fund (FIF) and the Financial Inclusion
Technology Fund, which shall be contributed by Government of India, RBI and NABARD.
Rural
Development
°
Rs. 66,100
crore provided for Rural Development.
°
Allocation
for Mahatma Gandhi National Rural Employment Guarantee Scheme stepped up to Rs.40,100
crore in 2010-11.
°
An amount
of Rs.48,000 crore allocated for rural infrastructure programmes under Bharat Nirman.
°
Unit
cost under Indira Awas Yojana increased to Rs.45,000 in the plain areas and to Rs.48,500
in the hilly areas. Allocation for this scheme increased to Rs.10,000 crore.
°
Allocation
to Backward Region Grant Fund enhanced by 26 per cent from Rs.5,800 crore in 2009-10
to Rs 7,300 crore in 2010-11.
°
Additional
central assistance of Rs 1,200 crore provided for drought mitigation in the Bundelkhand
region.
Urban
Development and Housing
°
Allocation
for urban development increased by more than 75 per cent from Rs.3,060 crore to
Rs.5,400 crore in 2010-11.
°
Allocation
for Housing and Urban Poverty Alleviation raised from Rs.850 crore to
Rs.1,000
crore in 2010-11.
°
Scheme
of one per cent interest subvention on housing loan upto Rs.10 lakh, where the cost
of the house does not exceed Rs.20 lakh announced in the last Budget
extended up to March 31, 2011. Rs.700 crore provided for this scheme for the year
2010-11.
°
Rs.1,270
crore allocated for Rajiv Awas Yojana as compared to Rs.150 crore last year.
Micro,
Small & Medium Enterprises
°
High
Level Council on Micro and Small Enterprises to monitor the implementation of the
recommendations of High-Level Task Force constituted by Prime Minister.
°
Allocation
for this sector to be increased from Rs.1,794 crore to Rs.2,400 crore for the year
2010-11.
°
The corpus
for Micro-Finance Development and Equity Fund doubled to Rs.400 crore in 2010-11.
Unorganised
Sector
National
Social Security Fund for unorganised sector workers
°
National
Social Security Fund for unorganised sector workers to be set up with an initial
allocation of Rs.1000 crore. This fund will support schemes for weavers, toddy tappers,
rickshaw pullers, bidi workers etc.
°
Rashtriya
Swasthya Bima Yojana
benefits
extended to all such Mahatma Gandhi NREGA
beneficiaries who have worked for more than 15 days during the preceding financial
year.
°
A new
initiative, Swavalamban will be available for persons who join New Pension
Scheme (NPS), with a minimum contribution of Rs.1,000 and a maximum contribution
of Rs.12,000 per annum during the financial year 2010-11, wherein Government will
contribute Rs.1,000 per year to each NPS account opened in the year 2010-11. Allocation
of Rs.100 crore made for this initiative.
Skill
development
°
National
Skill Development Corporation has approved three projects worth about Rs 45 crore
to create 10 lakh skilled manpower at the rate of one lakh per annum.
°
An extensive
skill development programme in the textile and garment sector to be launched by
leveraging the strength of existing institutions and instruments of the Textile
Ministry to train 30 lakh persons over 5 years.
Social
Welfare
°
Plan
outlay for Women and Child Development stepped up by almost 50 per cent.
°
The ICDS
platform being expanded for effective implementation of the Rajiv Gandhi Scheme
for Adolescent Girls.
°
Saakshar
Bharat to further improve female literacy rate launched with a target of 7
crore non-literate adults which includes 6 crore women.
°
Mahila
Kisan Sashaktikaran Pariyojana
to meet
the specific needs of women farmers to be launched with a provision of Rs 100 crore
as a sub-component of the National Rural Livelihood Mission.
°
Plan
outlay of the Ministry of Social Justice and Empowerment enhanced by 80 per cent
to Rs.4500 crore. With this enhancement, the Ministry will be able to revise rates
of scholarship under its post matric scholarship schemes for SCs and OBC students.
°
Plan
allocation for the Ministry of Minority Affairs increased by 50 per cent from Rs.1,740
crore to Rs.2,600 crore for the year 2010-11.
STRENGTHENING
TRANSPARENCY & PUBLIC ACCOUNTABILTY
°
Financial
Sector Legislative Reforms Commission to be set up to rewrite and clean up the financial
sector laws to bring them in line with the requirements of the sector.
°
Rs 1,900
crore allocated to the Unique Identification Authority of India (UIDAI) for 2010-11.
UIDAI will be able to meet its commitments of issuing the first set of UID numbers
in the coming year
°
A Technology
Advisory Group for Unique Projects (TAGUP) to be set up to look into various technological
and systemic issues for effective tax administration and financial governance.
°
Independent
Evaluation Office (IEO) chaired by the Deputy Chairman, Planning Commission to be
set up to evaluate the impact of flagship programmes.
°
Allocation
for Defence increased to Rs. 1,47,344 crore including Rs 60,000 crore for capital
expenditure.
°
About
2,000 youth to be recruited as constables in five Central Para Military Forces from
Jammu and Kashmir in the year 2010.
°
Planning
Commission to prepare an integrated action plan for the thirty-three left wing extremism
affected districts. Adequate funds will be made available to support the action
plan.
°
Government
has approved the setting up of the National Mission for Delivery of Justice and
Legal Reforms to help reduce legal backlog in courts from an average of 15 years
at present to 3 years by 2012.
BUDGET
ESTIMATES 2010-11
°
The Gross
Tax Receipts are estimated at Rs. 7,46,651 crore
°
The Non
Tax Revenue Receipts are estimated at Rs. 1,48,118 crore.
°
The net
tax revenue to the Centre as well as the expenditure provisions in 2010-11have been
estimated with reference to the recommendations of the Thirteenth Finance Commission.
°
The total
expenditure proposed in the Budget Estimates is Rs. 11,08,749 crore, which is an
increase of 8.6 per cent over last year.
°
The Plan
and Non Plan expenditures in BE 2010-11 are estimated at Rs. 3,73,092 crore and
Rs. 7,35,657 crore respectively. While there is 15 per cent increase in Plan
expenditure, the increase in Non Plan expenditure is only 6 per cent over the BE of
previous year.
°
Fiscal
deficit for BE 2010-11 at 5.5 per cent of GDP, which works out to Rs.3,81,408 crore.
°
Taking
into account the various other financing items for fiscal deficit, the actual net
market borrowing of the Government in 2010-11 would be of the order of Rs.3,45,010
crore. This would leave enough space to meet the credit needs of the private sector.
°
The rolling
targets for fiscal deficit are pegged at 4.8 per cent and 4.1 per cent for 2011-12
and 2012-13, respectively.
°
Against
a fiscal deficit of 7.8 per cent in 2008-09, inclusive of oil and fertilizer bonds,
the comparable fiscal deficit is 6.9 per cent as per the Revised Estimates for 2009-10.
°
Conscious
effort made to avoid issuing bonds to oil and fertilizer companies. Government
would like to continue with this practice of extending Government subsidy
in cash, thereby bringing all subsidy related liabilities into Governments fiscal
accounting.
PART
B TAX PROPOSALS
°
The Centralized
Processing Centre at Bengaluru is now fully functional and is processing around
20,000 returns daily. This initiative will be taken forward by setting up two more
Centres during the year.
°
The Income
Tax department has introduced Sevottam, a pilot project at Pune, Kochi
and Chandigarh through Aayakar Seva Kendras, which provide a single window system
for registration of all applications including those for redressal of grievances
as well as paper returns. The scheme will be extended to four more cities in the
year.
°
Automation
of Central Excise & Service Tax, has already been rolled out throughout the country
this year. Similarly, a Mission Mode Project for computerization of Commercial Taxes
in States has been approved recently. With an outlay of Rs. 1133 crore of which
the Centres share is Rs. 800 crore, the project will lay the foundation for the
launch of GST.
°
The income
tax department to notify SARAL-II form for individual salaried taxpayers for the
coming assessment year.
°
Scope
of cases which may be admitted by the Settlement Commission expanded to include
proceedings related to search and seizure cases pending for assessment.
Scope
of Settlement Commission also expanded in respect of Central Excise and Customs
to include certain categories of cases that hitherto fell outside its jurisdiction.
°
Bi-lateral
discussions commenced to enhance the exchange of bank related and other information
to effectively track tax evasion and identify undisclosed assets of resident Indians
lying abroad.
Direct
Taxes
°
Income
tax slabs for individual taxpayers to be as follows
Income
upto Rs 1.6 lakh Nil
Income
above Rs 1.6 lakh and upto Rs. 5 lakh 10 per cent
Income
above Rs.5 lakh and upto Rs. 8 lakh 20 per cent
Income
above Rs. 8 lakh 30 per cent
°
Deduction
of an additional amount of Rs. 20,000 allowed, over and above the existing limit
of Rs.1 lakh on tax savings, for investment in long-term infrastructure bonds as
notified by the Central Government
°
Besides
contributions to health insurance schemes which is currently allowed as a deduction
under the Income-tax Act, contributions to the Central Government Health Scheme
also allowed as a deduction under the same provision.
°
Current
surcharge of 10 per cent on domestic companies reduced to 7.5 per cent.
°
Rate
of Minimum Alternate Tax (MAT) increased from the current rate of 15 per cent to
18 per cent of book profits.
°
To further
encourage R&D across all sectors of the economy, weighted deduction on expenditure
incurred on in-house R&D enhanced from 150 per cent to 200 per cent. Weighted deduction
on payments made to National Laboratories, research associations, colleges, universities
and other institutions, for scientific research enhanced from 125 per cent to 175
per cent.
°
Payment
made to an approved association engaged in research in social sciences or statistical
research to be allowed as a weighted deduction of 125 per cent. The income of such
approved research association shall be exempt from tax.
°
Benefit
of investment linked deduction under the Act extended to new hotels of two-star
category and above anywhere in India to boost investment in the tourism sector.
°
Allow
pending projects to be completed within a period of five years instead of four years
for claiming a deduction of their profits, as a one time interim relief to the housing
and real estate sector. Norms for built-up area of shops and other commercial establishments
in housing projects to be relaxed to enable basic facilities for their residents.
°
Limits
for turnover over which accounts need to be audited enhanced to Rs. 60 lakh
for businesses and to Rs. 15 lakh for professions.
°
Limit
of turnover for the purpose of presumptive taxation of small businesses enhanced
to Rs. 60 lakh.
°
If tax
has been deducted on payment by way of any expense and is paid before the due date
of filing the return, such expenditure to be allowed for deduction. Interest charged
on tax deducted but not deposited by the specified date to be increased from 12
per cent to 18 per cent per annum.
°
To facilitate
the conversion of small companies into Limited Liability Partnerships, transfer
of assets as a result of such conversion not to be subject to capital gains tax.
°
The
advancement of any other object of general public utility to be considered as charitable
purpose even if it involves carrying on of any activity in the nature of trade,
commerce or business provided that the receipts from such activities do not exceed
Rs.10 lakh in the year .
°
Proposals
on direct taxes estimated to result in a revenue loss of Rs. 26,000 crore for the
year.
Indirect
Taxes
°
Rate
reduction in Central Excise duties to be partially rolled back and the standard
rate on all non-petroleum products enhanced from 8 per cent to 10 per cent ad
valorem.
°
The specific
rates of duty applicable to portland cement and cement clinker also adjusted upwards
proportionately. Similarly, the ad valorem component of excise duty
on large cars, multi-utility vehicles and sports-utility vehicles increased by 2
percentage points to 22 per cent.
°
Restore
the basic duty of 5 per cent on crude petroleum; 7.5 per cent on diesel and petrol
and 10 per cent on other refined products. Central Excise duty on petrol and diesel
enhanced by Re.1 per litre each.
°
Some
structural changes in the excise duty on cigarettes, cigars and cigarillos to be
made coupled with some increase in rates. Excise duty on all non-smoking tobacco such
as scented tobacco, snuff, chewing tobacco etc to be enhanced. Compounded levy scheme
for chewing tobacco and branded unmanufactured tobacco based on the capacity of
pouch packing machines to be introduced.
Agriculture
& Related Sectors
°
Provide
project import status with a concessional import duty of 5 per cent for the setting
up of mechanised handling systems and pallet racking systems in mandis or warehouses
for food grains and sugar as well as full exemption from service tax for the installation
and commissioning of such equipment.
°
Provide
project import status at a concessional customs duty of 5 per cent with full exemption
from service tax to the initial setting up and expansion of
♦
Cold
storage, cold room including farm pre-coolers for preservation or storage of agriculture
and related sectors produce ; and
♦
Processing
units for such produce.
°
Provide
full exemption from customs duty to refrigeration units required for the manufacture
of refrigerated vans or trucks.
°
Provide
concessional customs duty of 5 per cent to specified agricultural machinery not
manufactured in India;
°
Provide
central excise exemption to specified equipment for preservation, storage and processing
of agriculture and related sectors and exemption from service tax to the storage
and warehousing of their produce; and
°
Provide
full exemption from excise duty to trailers and semi-trailers used in agriculture.
°
Concessional
import duty to specified machinery for use in the plantation sector to be, extended
up to March 31, 2011 along with a CVD exemption.
°
To exempt
the testing and certification of agricultural seeds from service tax.
°
The transportation
by road of cereals, and pulses to be exempted from service tax.
Transportation
by rail to remain exempt.
°
To ease
the cash flow position for small-scale manufacturers, they would be permitted to
take full credit of Central Excise duty paid on capital goods in a single installment
in the year of their receipt. Secondly, they would be permitted to pay Central Excise
duty on a quarterly, rather than monthly, basis.
Environment
°
To build
the corpus of the National Clean Energy Fund, clean energy cess on coal produced
in India at a nominal rate of Rs.50 per tonne to be levied. This cess will also
apply on imported coal.
°
Provide
a concessional customs duty of 5 per cent to machinery, instruments, equipment and
appliances etc. required for the initial setting up of photovoltaic and solar thermal
power generating units and also exempt them from Central Excise duty. Ground source
heat pumps used to tap geo-thermal energy to be exempted from basic customs duty
and special additional duty.
°
Exempt
a few more specified inputs required for the manufacture of rotor blades for wind
energy generators from Central Excise duty.
°
Central
Excise duty on LED lights reduced from 8 per cent to 4 per cent at par with Compact
Fluorescent Lamps.
°
To remedy
the difficulty faced by manufacturers of electric cars and vehicles in neutralising
the duty paid on their inputs and components, a nominal duty of 4 per cent on such
vehicles imposed. Some critical parts or sub-assemblies of such vehicles exempted
from basic customs duty and special additional duty subject to actual user condition.
These parts would also enjoy a concessional CVD of 4 per cent.
°
A concessional
excise duty of 4 per cent provided to soleckshaw, a product developed by CSIR
to replace manually-operated rickshaws. Its key parts and components to be exempted
from customs duty.
°
Import
of compostable polymer exempted from basic customs duty.
Infrastructure
°
Project
import status to Monorail projects for urban transport at a concessional basic
duty of 5 per cent granted.
°
To allow
resale of specified machinery for road construction projects on payment of import
duty at depreciated value.
°
To encourage
the domestic manufacture of mobile phones accessories, exemptions from basic, CVD
and special additional duties are now being extended to parts of battery chargers
and hands-free headphones. The validity of the exemption from special additional
duty is being extended till March 31, 2011.
Medical
Sector
°
Uniform,
concessional basic duty of 5 per cent, CVD of 4 per cent with full exemption from
special additional duty prescribed on all medical equipments. A concessional basic
duty of 5 per cent is being prescribed on parts and accessories for the manufacture
of such equipment while they would be exempt from CVD and special additional duty.
°
Full
exemption currently available to medical equipment and devices such as assistive
devices, rehabilitation aids etc. retained. The concession available to Government
hospitals or hospitals set up under a statute also retained.
°
Specified
inputs for the manufacture of orthopaedic implants exempted from import duty.
°
To address
the difficulties experienced by film industry in importing digital masters of films
for duplication or distribution loaded on electronic medium vis-a-vis those
imported on cinematographic film, owing to a differential customs duty structure,
customs duty to be charged only on the value of the carrier medium. The same dispensation
would apply to music and gaming software imported for duplication. In all such cases
the value representing the transfer of intellectual property rights would be subjected
to service tax.
°
Provide
project import status at a concessional customs duty of 5 per cent with full exemption
from special additional duty to the initial setting up Digital Head End equipment
by multi-service operators.
Precious
Metals
°
Rates
on precious metals indexed as follows:
♦
On gold
and platinum from Rs.200 per 10 grams to Rs.300 per 10 grams
♦
On silver
from Rs.1,000 per kg to Rs.1,500 per kg.
°
Basic
customs on Rhodium a precious metal used for polishing jewellery reduced to 2
per cent.
°
Basic
customs duty on gold ore and concentrates reduced from 2 per cent ad valorem
to a specific duty of Rs.140 per 10 grams of gold content with full exemption
from special additional duty. Further, the excise duty on refined gold made
from such ore or concentrate reduced from 8 per cent to a specific duty of
Rs.280 per 10 grams.
Other
Proposals
°
Full
exemption from import duty available to specified inputs or raw materials required
for the manufacture of sports goods expanded to cover a few more items.
°
Basic
customs duty on one of key components in production of micro-wave ovens, namely
magnetrons, reduced from 10 per cent to 5 per cent.
°
Value
limit of Rs. 1 lakh per annum on duty-free import of commercial samples as personal
baggage enhanced to Rs. 3 lakh per annum.
°
Outright
exemption from special additional duty provided to goods imported in a pre-packaged
form for retail sale. This would also cover mobile phones, watches and ready-made
garments even when they are not imported in pre-packaged form. The refund-based
exemption is also being retained for cases not covered by the new dispensation.
°
Toy balloons
fully exempted from Central Excise duty.
°
Reduction
in basic customs duty on long pepper from 70 per cent to 30 per cent;
°
Reduction
in basic customs duty on asafoetida from 30 per cent to 20 per cent;
°
Reduction
in central excise duty on replaceable kits for household type water filters other
than those based on RO technology to 4 per cent;
°
Reduction
in central excise duty on corrugated boxes and cartons from 8 per cent to 4 per
cent;
°
Reduction
in central excise duty on latex rubber thread from 8 per cent to 4 per cent; and
°
Reduction
in excise duty on goods covered under the Medicinal and Toilet Preparations
Act from 16 per cent to 10 per cent.
°
Proposals
relating to customs and central excise are estimated to result in a net revenue
gain of Rs. 43,500 crore for the year.
Service
Tax
°
Rate
of tax on services retained at 10 per cent to pave the way forward for GST.
°
Certain
services, hitherto untaxed, to be brought within the purview of the service tax levy.
These to be notified separately.
°
Process
of refund of accumulated credit to exporters of services, especially in the area
of Information Technology and Business Process Outsourcing, made easy by making
necessary changes in the definition of export of services and procedures.
°
Accredited
news agencies which provide news feed online that meet certain criteria, exempted
from service tax.
°
Proposals
relating to service tax are estimated to result in a net revenue gain of Rs 3,000
crore for the year.
°
Proposals
on direct taxes estimated to result in a revenue loss of Rs. 26,000 crore for the
year. Proposals relating to Indirect Taxes estimated to result in a net revenue
gain of Rs.46,500 crore for the year. Taking into account the concessions being
given in the tax proposals and measures taken to mobilise additional resources,
the net revenue gain is estimated to be Rs. 20,500 crore for the year.
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