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Key Indirect Tax Highlights, Union Budget 2020

Posted on 01 February 2020,    
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Indirect Tax

• GST:

o Cash reward system envisaged to incentivise customers to seek invoice.
o Simplified return with features like SMS based filing for nil return and improved input tax credit flow to be implemented from 1st April, 2020 as a pilot run.
o Dynamic QR-code capturing GST parameters proposed for consumer invoices.
o Electronic invoice to capture critical information in a centralized system to be implemented in a phased manner.
o Aadhaar based verification of taxpayers being introduced to weed out dummy or non-existent units.
o GST rate structure being deliberated to address inverted duty structure.

• Customs Duties:

o Customs duty raised on footwear to 35% from 25% and on furniture goods to 25% from 20%.
o Basic customs duty on imports of news print and light-weight coated paper reduced from 10% to 5%.
o Customs duty rates revised on electric vehicles and parts of mobiles.
o 5% health cess to be imposed on the imports of medical devices, except those exempt from BCD.
o Lower customs duty on certain inputs and raw materials like fuse, chemicals, and plastics.
o Higher customs duty on certain goods like auto-parts, chemicals, etc. which are also being made domestically.

• Trade Policy Measures

o Customs Act being amended to enable proper checks of imports under FTAs.
o Rules of Origin requirements to be reviewed for certain sensitive items.
o Provisions relating to safeguard duties to be strengthened to enable regulating such surge in imports in a systematic way.
o Provisions for checking dumping of goods and imports of subsidized goods being strengthened.
o Suggestions for reviews of exemptions from customs duty to be crowd-sourced.

• Excise duty proposed to be raised on Cigarettes and other tobacco products, no change made in the duty rates of bidis.

• Anti-dumping duty on PTA abolished to benefit the textile sector.

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