Highlights of Union Budget 2016-17

BUDGET SEMINAR ACAE jointly with DTPA –  MARCH 1, 2016

       CUSTOMS  DUTY

Heading

Existing

Proposed

Project Imports for cold storage, cold room (including for farm level pre-cooling) being extended for ‘cold chain including pre-cooling unit, pack houses, sorting and grading lines and ripening chamber’s also.

10%

5%

Refrigerated containers

10%

5%

Imitation Jewellery

10%

15%

Solar Lamp

12.5%

NIL

The duty free import allowance for bona fide gifts imported by post or air by courier service.

Rs. 100000

Rs.20000

Coal; briquettes, ovoid and similar solid fuels manufactured from coal

2.5% / 10%

2.5%

Coal gas, water gas, producer gas and similar gases, other than petroleum gases and other gaseous hydrocarbons

10%

5%

CVD exemption on specified machinery required for construction of roads being withdrawn.

NIL

12.5%

Disposable sterilized dialyzer and micro barrier of artificial kidney being exempted from BCD, Excise duty / CVD and SAD

Applicable BCD, excise/CVD,SAD

Nil BCD NIL excise/ CVD nil SAD

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Highlights of Union Budget 2016-17

BUDGET SEMINAR ACAE jointly with DTPA –  MARCH 1, 2016

EXCISE DUTY

Heading

Existing

Proposed

Excise duty on refrigerated containers being reduced

12.5%

6%

Excise duty on parts of railway or tramway locomotives or rolling stock and railway or tramway track fixtures and fittings, railway safety or traffic control equipment, etc. being reduced.

12.5%

6%

Excise duty on branded readymade garments and made up articles of textiles of retail sale price of Rs. 1000 or more being changed.

Nil (Without ITC) or 6% 12.5% (with ITC )

2% (without ITC) or 12.5% (with ITC)

The Tariff value for excise / CVD purposes on readymade garments and made up articles of textiles being changed.

30% of retail sale price

60% of retail sale price

The Tariff value for excise / CVD purpose on readymade garments and made up articles of textiles being changed.

NIL

1% (without ITC ) or 12.5% (ITC)

Excise duty on waters including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured being increased

18%

21%

Excise duty on Gutkha, chewing tobacco (including filter Khaini) and jarda scented tobacco being increased

70%

81%

Excise duty on Unmanufactured tobacco being increased

55%

64%

 

Highlights of Union Budget 2016-17

BUDGET SEMINAR ACAE jointly with DTPA –  MARCH 1, 2016

        Tax rate for Domestic Companies:

  • Where its total turnover or the gross receipt in the previous year 2014-15 does not exceed Rs. 5 crores – 29% of the total income shall be taxable.
  • And in all other cases, it will be 30% of the total income.

    Surcharge on domestic companies:

  • 7% whose taxable income exceeds Rs. 1 crore, but exceeds Rs. 10 crores p.a
  • 12% whose taxable income exceeds Rs. 10 crores p.a

    Surcharge on other than domestic companies:

  • 2% whose taxable income exceeds Rs.1 crore, but does not exceeds Rs. 10 crores p.a
  • 5% whose taxable income exceeds Rs.10 crores p.a

    Dividend Distribution Tax Increased:

    Additional tax at the rate of 15 per cent on dividends paid to its shareholders by the domestic company. [Section 115 – O]

Key Indirect Tax Proposals 

Krishi Kalyan Cess @ 0.5% on the value of taxable services proposed to be introduced w.e.f 1st day of June, 2016 to improve agriculture & other purpose relating to it.

Equalisation levy proposed to be charged @6% of the amount of consideration for any specified serviced received or receivable exceeding Rs. 1 lacs in the financial year by a non resident person not having permanent establishment in India from:

  1. A resident person carrying on business or profession; or
  2. A non- resident having a permanent establishment in India.
  • The Indirect Tax Dispute Resolution Scheme, 2016 proposed to come into force on 1st June, 2016 applicable to the declaration made up to 31st December, 2016:

A person may make a declaration to the designated authority on or before 31st Dec, 2016.

The designated authority shall acknowledge the same in such form as maybe prescribed.

The declaring shall pay tax due along with the interest & penalty equivalent to 25% of the penalty imposed in the impugned order within 15 days of the receipt of acknowledgement & intimate the designated authority within 7 days of making such payment giving details of payment made along with the proof. Within 15 days of the receipt of such proofs, the designated authority shall pass an order of discharge of dues.

  • No Service tax for houses built under 60 square meters.
  • Notification No. 14/2012 – ST, was amended by notification No. 1/2016 – ST so as to, inter alia, allow refund of service tax on services used beyond the factory etc. for the export. This amendment is being made effective from, 1st July 2012. This will come into effect from the date of enforcement of Finance Bill 2016.
  • Quarterly payment of services tax being extended to ‘one Person Company’ (OPC) and HUF also, with effect from 01.04.2016
  • Facility of payment of service tax being extended on receipt basis to ‘One Person Company’ (OPC) also, with effect from 01.04.2016
  • 13 cesses levied by other Ministries/Departments and administered by the Department of Revenue, where the revenue collection from each of them is less than Rs. 50 crore in a year being abolished.
  • CENVAT Credit Rules, 2004 being amended, to improve credit flow, reduce the compliance cost and litigation, particularly those relating to apportionment of credit between exempted and non-exempted final products/ services. Changes are also being made in the provisions relating to input services credit to outsourced manufacturers, under certain circumstances. Amendments will also enable manufactures with multiple manufacturing units to maintain a commom warehouse for inputs and distribute inputs with credits to the individual manufacturing units. This will come into effect from 01.04.2016
  • The monetary limit for launching prosecution being increased to Rs. 2 crore of services tax evasion and the power to arrest being restricted only to situations where the tax payer has collected the tax but no deposited in to the exchequer above a certain threshold of Rs. 2 crore. This will come into effect from date of enforcement of Finance Bill 2016.
  • Notification No. 27/2012 – C.E. (N.T.) being amended so as to provided that time limit for filling application for refund of Cenvat Credit, in case of export of services, is 1 year from the spevified date, with effect from 01.03.2016.
  • Period of limitation in respect of levy/payment/refund of service tax due to some error, is increased to 30 months from 18 months.

Fuel cost to be included for availing abatement on services by renting of motor cab from 01.04.2016.

Highlights of Union Budget 2016-17

BUDGET SEMINAR ACAE jointly with DTPA –  MARCH 1, 2016

Key Direct Tax Proposals

  • People with income less than Rs. 5 lakh to get rebate of Rs 5,000, up from Rs 2,000 last year.
  • Deduction for those who pay rent and do not have a house of their own and also do not get HRA from employers up from Rs. 24,000 to Rs. 60,000 p.a.
  • Disallowance will be limited to 1% of the actual expenditure claimed under rule 8D of Section 14A of income tax Act.
  • Tax on retirees: At present, social security schemes run by retirement fund body EPFO are tax free EEE ( exempt – exempt – exempt) scheme. That means deposits, accrual of interest and withdrawals are tax free under the scheme in order to bring greater parity in tac treatment of different types of pension plans, it is proposed that the contributions made on or after April 1, 2016 by an employee participating in a recognized provident fund and superannuation on withdrawal shall be exempt from tax. It is proposed to provide that any payment in commutation of an annuity purchased out of contrinution made on or after April 1, 2016, which exceeds 40% of the annuity, Shall be chargeable to tax.
  • For first home buyers, additional exemption of interested on housing loan of Rs. 50,000. Qualifying Criteria is that the loan value should be max Rs. 35 Lakh on cost of house not exceeding Rs. 50 lakh.
  • Tax-free superannuation limit increased to Rs 1.5 lacs.
  • Dividend income of individuals and HUF exceeding Rs 10 lac p.a will now be taxable @10%
  • Tax holiday for eligible starts – ups set up after April 1, 2016 for three consecutive years out of the first five years of setting up the company.
  • Long Term Capital gain period for unlisted companied reduced from 3 to 2 years in respect of sale of shares.
  • Presumptive Taxation limit enhanced to Rs. 2 crores. Thus small & medium business can opt for 8% presumed income & will not have to maintain accounts or get them audited up to turnover of Rs. 2 Cr.