INDIA BUDGET STATEMENT - Nangia Andersen · growth, incentivize affordable housing, promote digital...

This document summarises the important provisions of the Budget 2019 proposals as placed before the Parliament. Topics presented are grouped into chapters and sections to facilitate an understanding of the proposals. These are, however, not mutually exclusive.Unless otherwise stated, Direct Tax Proposals will be applicable from A.Y. 2020-2021.The proposals are subject to amendment as the Finance Bill passes through the Parliament.All reasonable care has been taken in preparing this document. Nangia & Co. LLP, Chartered Accountants, accepts no responsibility for any errors, if it may contain, whether caused by negligence or otherwise, for any loss, howsoever caused or sustained by the person who relies on it.This document is not an offer, invitation or solicitation of any kind and is meant for use of clients and firm’s personnel. All pictures used under the Creative Commons License.

Foreword ....................................................................... 2Executive Summary .................................................... 4 Budget Financials .......................................................10 Economic Survey ..........................................................14 Direct Tax Proposals ...................................................22 Tax Rates ............................................................ 22 Personal Tax ........................................................ 23 Taxation of Non-residents ................................ 28 Startups ................................................................ 30 Corporate and Business Taxation ................... 32 Transfer Pricing ................................................... 37 Assessment Procedures ................................... 39 Miscellaneous Provisions ................................. 39Indirect Tax Proposals ................................................. 42 Customs ............................................................... 43

Excise ................................................................... 49 Service Tax ........................................................... 50Foreign Direct Investment & Regulatory Proposals ................................................. 52Sector Wise Impact ..................................................... 54 Investment Expenditure and Policy Initiatives .................................................. 54 Social Sector........................................................ 54 MSMEs and Startups ........................................ 56 Infrastructure Development ............................. 56 Financial Sector .................................................. 57 Technology .......................................................... 58 Tourism ................................................................ 58 Glossary ......................................................................... 60

CONTENTS

1

FOREWORDPresenting Union Budget 2019 has added to the list of ‘firsts’, for India’s Finance Minister Nirmala Sitharaman, who was the first full-time female defence minister of the Country and now the first full-time female finance minister of the Country.

Taking forward the ‘Ten-Dimensional Vision’ for the decade, set-forth by the Narendra Modi led government in the interim Budget of 2019-2020 presented in February 2019, Union Budget 2019 has set in motion the aspirational pursuit of India becoming a USD 5 Trillion economy, in the next few years.

The focus of the Budget is to catalyze, fast, sustained and investment driven growth. Finance Minister’s speech emphasized policy measures ranging from transforming rural lives, infrastructural availability for greater industrial investment, enhancing sources of capital for infrastructure financing, making India a more attractive Foreign Domestic Investment (FDI) destination, transforming India’s higher education system to one of the global best education systems, providing ease of living to its citizens in India and encourage and facilitate the role of women towards women-led initiates and movements etc.

Economic survey 2018-19 focused heavily on the need for an “optimal tax policy” and a tax system that can foster innovation, raise revenues efficiently and fairly while encouraging bonafide taxpayers and punishing malafide ones. The main focus of the survey has been on fostering investment through optimal tax policy, improving Tax compliance, ramping up capacity in the lower judiciary and promoting Electric Vehicles.

While the Finance Minister highlighted the accomplishments under different schemes launched during the previous tenure of the current government, the current focus has been on more macro issues, amongst others, like management / preservation of Water Resources by constituting a “Jal Shakti Mantralaya”. The Finance Minister also proposed a scheme to provide pension to 30 Million retail traders under “Pradhan Mantri Karam Yogi Maandhan Scheme”.

The budget has also given importance on achieving balanced socio-economic growth through fiscal policies to promote Electric Vehicles, developing inland waterways to decongest rails and roads, to provide Social Stock Exchanges for listing social enterprises working for realization of social welfare objective, promote start up, launch of exclusive channel for startups and many more.

Several measures have been proposed to ease FDI norms by allowing 100% FDI in insurance intermediaries and proposal for easing of local sourcing norms for Single Brand Retail Trading, to promote foreign capital. Further, it is proposed to consider suggestions for further opening up of FDI in aviation,

media (animation, AVGC) and insurance sectors.

The Finance Minister started the tax proposals by thanking the honest taxpayers for their contribution towards nation building and boasted an increase in tax collections by over 78%, from INR 6,380 Billion in Financial Year 2013-14 to around INR 11,370 Billion in Financial Year 2018-19.

While the budget proposals were almost none with respect to tax benefits for individuals, the aim was to stimulate growth, incentivize affordable housing, promote digital economy, bring greater transparency and encourage start-

ups by releasing entrepreneurial spirits. Some proposals focused on ease of doing business by minimizing scrutiny assessments on ‘angel tax’ issues, faceless assessments,

interchangeability of Aadhar & PAN.

To promote electric vehicles the government extended additional income tax deduction of INR 0.15 Million on the interest paid on loans taken to purchase electric vehicles for individuals. Further, it is proposed to provide investment linked income tax exemptions on “Mega Investment in Sunrise and Advanced Technology Areas”. Budget also extended some income tax reliefs for affordable housing sector, NBFCs, units situated in IFSCs, startups.

With respect to indirect taxes, in order to further simplify the GST processes, quarterly returns have been proposed to be introduced for taxpayers with turnover less than INR 50 Million. A dispute resolution cum amnesty scheme called “the Sabka Vishwas Legacy Dispute Resolution Scheme, 2019” is being introduced for resolution and settlement of legacy cases of Central Excise and Service Tax, the proposed Scheme covers past disputes of taxes which have got subsumed in GST.

Budget also saw some rate changes in indirect taxes, like increase in ‘Special Additional Excise duty’ and ‘Road and ‘Infrastructure Cess’ each, by one rupee a litre on petrol and diesel, increase custom duty on gold and other precious metals from 10% to 12.5%.

Finance Minister has summoned forth everyone to place emphasis on their Duty towards our nation. On the Government’s part, with the slew of policy reforms and fiscal benefits to the corporates, the Finance Minister has tried to set the trajectory, towards arguably, a well-tested formula for success of “Reform, Perform, Transform”.

The budget has also given importance on achieving balanced socio-economic growth through fiscal policies to promote Electric Vehicles, developing inland waterways to decongest rails and roads, to provide Social Stock Exchanges for listing social enterprises working for realization of social welfare objective, promote start up, launch of exclusive channel for startups and many more.

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EXECUTIVE SUMMARY

DIRECT TAXES Tax Rates

• No change in basic personal tax rates, however,

Ʈ Surcharge increased resulting in an effective tax rate of 39% for individuals with taxable income of INR 20 million up to INR 50 million.

Ʈ Surcharge increased resulting in an effective tax rate of 42% for individuals with taxable income exceeding INR 50 million.

• Domestic companies to be taxed at 25% if turnover in 2017-18 does not exceed INR 4 billion. The rate is expected to cover 99.3% of all domestic companies.

Personal Tax

• PAN and AADHAAR to be made interchangeable

• Increase in the threshold for launching prosecution for non-filing income tax return.

• Insertion of new Section 194M in the Act to provide for levy of TDS @ 5% where the sum paid or credited in a year on account of contractual work or professional fees exceeds INR 5 Million in a year.

• Explanation to Section 194-IA of the Act that the term “consideration” of immovable property shall include all the other types of payments such as club membership fees, car parking fees, electricity and water facility fees, etc. or any other charges of similar nature.

Corporate & Business Taxation

• Listed companies shall also be liable to pay additional tax at 20 percent in case of buyback of share, as is the case currently for unlisted companies.

• Investment-linked deduction for mega-manufacturing plants in sunrise and advance technology areas (mentioned in the budget speech).

• Aggregate of carry forward and set off of losses to be allowed as deduction for MAT computation in case

of certain distressed companies.

• Measures to encourage cash less economy introduced by allowing through other prescribed modes as well.

• Modification to align the definition of “affordable housing” under Section 80-IBA with the definition under GST Act for housing project approved on or after 1st day of September, 2019.

• Interest on certain bad and doubtful debts to be taxable in the hands of deposit taking and systematically important non-deposit taking NBFCs, only in the year in which such interest is received.

• Tax recovery no longer required in respect of non-deduction of tax from payments to non-residents provided such non-resident has filed income-tax return. Further, no disallowance of expenditure for computing business income in such cases.

• Definition of ‘demerger’ relaxed to allow the resulting company to record the value of the property and liabilities at a value different from the book value in compliance with the Indian Accounting Standards.

• E-assessment proceedings to be further strengthened with an aim to reduce human intervention through random allocation of scrutiny assessments.

Start-ups

• Losses can be carried forward and set off only satisfaction of either condition of continuation of 51% of voting power or 100% original shareholders.

• Capital gains exemption from sale of residential house for investment in start-ups.

• No scrutiny in respect of valuation of share premiums for start-ups and their investors who file requisite declarations and provide information in their returns (announced in Budget speech).

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• With e-verification for establishing identity of investors and source of funds, funds raised by start-ups will not require any kind of scrutiny from the Income Tax Department (announced in Budget speech).

• NoinquiryorverificationwillbedoneinthependingassessmentsbyAssessingOfficerswithoutobtainingsupervisoryapproval(announcedinBudgetspeech).

Taxation of Non-Residents

• Gift of money or property made by a resident to another resident on or after July 5, 2019 by a person resident in India to a person outside India, shall be deemed to accrue or arise in India.

• Applications for lower withholding tax order in respect of payments to be made to a non-resident to be made online.

Transfer Pricing

• Clarification proposed on assessment proceedings by tax authorities on modified return filed post Advance Pricing Agreement (APA). The Assessing Officers

shall now pass an order modifying only such portion of the total income of the relevant assessment year determined in such assessment or reassessment, having regard to and in accordance with the APA.

• Clarification on ‘Accounting Year’ as defined in Section 286 of the Income Tax Act, 1961 (the Act). It has been clarified that in case of the Alternate Reporting Entity (ARE) resident in India (of an international group), the accounting year for furnishing the Country-by-Country Report (CbCR) with the prescribed authority shall be that of the Parent entity of the Group.

• Rationalisation of Secondary Adjustment provisions. Significant amendment being that the condition of threshold of INR 10 million and of the primary adjustment made upto assessment year 2016-17 are alternate conditions. Further, it has been proposed to provide Taxpayer the option of availing a one-time settlement regime with full or part of secondary adjustment amount that is not repatriated to India to be settled at an additional prescribed tax charge over and above the payment of interest as per the existing provisions.

• It is proposed to substitute Section 92D of the Act, in order to provide that the information and document has to be kept and maintained by a constituent entity of an international group, and filing of required form, shall be applicable even when there is no international transaction undertaken by such constituent entity.

• Removal of “arm’s length compliance” requirement in case of offshore funds.

Miscellaneous

• New Insertion of Section 194N of the Act for levy of Tax deducted at source 2 @% on cash withdrawal in excess of INR 10 Million.

• Concessional rate extended for Short-term Capital Gains tax to certain equity-oriented fund of funds.

• Levy of securities transaction tax (STT) will be restricted only to the difference between settlement and strike price in case of exercise of options.

• Registration of trusts or institutions availing benefit of section 12AA may to be cancelled in certain situations for violating provisions of other applicable laws

• Additional steps will be undertaken for e-assessment proceedings and reduce human intervention through random allocation of scrutiny assessments.

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INDIRECT TAX AMENDMENTS CUSTOMS DUTY

• General rate of Basic Customs Duty remains unchanged at 10%.

• New chapter “Verification of identity and compliance” introduced, empowering proper officer of Customs to carry out verification of a person for protecting the interests of revenue or to prevent smuggling through the Aadhaar number or through such other alternative and viable means of identification.

• Officer of customs empowered to arrest a person who has committed an offence outside India or Indian Customs waters.

• Any bank account can be provisionally attached for safeguarding the government revenue and prevention of smuggling, for a period not exceeding 6 months. It is also being provided that a Principal Commissioner of Customs or Commissioner of Customs may further extend the period of attachment up to 6 months.

• Exemption on goods imported for used in generation of nuclear power.

• Basic Customs Duty of INR 1 per tonne has been levied on import of Petroleum Crude.

• Option to pay Basic Customs Duty at the rate of 7.5% at transaction value on goods imported without payment of customs duty for petroleum or coal bed methane operations, where disposal is made in unserviceable and mutilated condition.

EXCISE DUTY

• Basic Excise Duty of INR 1 per tonne has been levied on production of Petroleum Crude

• Exemption proposed on Crude Petroleum oil produced in specified oil fields under production sharing contracts or in the exploration blocks offered under the New Exploration Licensing Policy (NELP) through international competitive bidding

SERVICE TAX

• Dispute Resolution cum amnesty scheme is being introduced for resolution and settlement of legacy cases of Central Excise and Service Tax.

GOODS AND SERVICES TAX

• Constitution of National Appellate Authority for Advance Ruling for hearing appeals against conflicting advance rulings pronounced on the same question by the Appellate Authorities of two or more States or UT in case of distinct persons.

• Introduction of alternative composition scheme for supplier of services or mixed suppliers having an annual turnover in preceding financial year upto INR 5 Million.

• Higher threshold exemption limit from INR 2 Million to such amount not exceeding INR 4 Million in case of supplier who is engaged in exclusive supply of goods.

• Aadhaar authentication mandatory for specified

class of new taxpayers.

• Facility to the registered person to transfer an amount from one head to another head in the electronic cash ledger in relation to payment of tax interest, penalty, fee or any other amount.

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BUDGET FINANCIALS

Amount in INR Billion

2017-18 2018-19 2018-19 2019-20

Actuals Budget Estimates Revised Estimates Budget Estimates

1. Revenue Receipts (2+3) 14,352 17,257 17,297 19,628

2. Tax Revenue (Net to Centre) 12,425 14,806 14,844 16,496

3. Non-Tax Revenue 1,927 2,451 2,453 3,132

4. Capital Receipts (5+6+7) 7,068 7,165 7,276 8,236

5. Recoveries of Loans 156 122 132 148

6. Other Receipts 1,000 800 800 1,050

7. Borrowing and Other Liabilities 5,911 6,243 6,344 7,038

8. Total Receipts (1+4) 21,420 24,422 24,572 27,863

9. Total Expenditure (10+13) 21,420 24,422 24,572 27,863

10. On Revenue Account 18,788 21,418 21,406 24,478

11. Interest Payments 5,290 5,758 5,876 6,605

12. Grants in Aid for creation of capital assets 1,910 1,953 2,003 2,073

13. On Capital Account 2,631 3,004 3,166 3,386

14 Revenue Deficit (10-1) 4,436 4,160 4,109 4,850

(2.6) (2.2) (2.2) (2.3)

15 Effective Revenue Deficit (14-12) 2,526 2,207 2,106 2,777

(1.5) (1.2) (1.1) (1.3)

16 Fiscal Deficit [9-(1+5+6)] 5,911 6,243 6,344 7,038

(3.5) (3.3) (3.4) (3.3)

17 Primary Deficit (16-11) 621 485 468 433

(0.4) (0.3) (0.2) (0.2)

Capital receipts = (Recoveries of loans + Disinvestment Receipts + Borrowings and other liabilities) Revenue Deficit = (Revenue Receipts – Revenue Expenditure) Effective Revenue Deficit = (Capital Expnediture – Grants of creation of capital assets)

Fiscal deficit = (Total Receipts – Borrowings and other liabilities – Total Expenditure) Primary Deficit = (Fiscal Deficit – Interest Payments) BE = Budget Estimates RE= Revised Estimates

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Borrowings and Other Liabilities 20.00%Corporation Tax 21.00%Income Tax 16.00%Customs 4.00%Union Excise Duties 8.00%Goods and Service Tax 19.00%No Tax Revenue 9.00%Non Debt Capital Receipts 3.00%

Centrally Sponspored Scheme 9.00%Central Sector Scheme 13.00%Interest Payments 18.00%Defence 9.00%Subsidies 8.00%Finance Commission and Other Transfers 7.00%States shares of taxes and duties 23.00%Pensions 5.00%Other expenditure 8.00%

Where the rupee comes from

Where the rupee goes

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ECONOMIC SURVEY

for creating data “of the people, by the people, for the people”.

The other highlights of the Survey are discussed as under:

FISCAL DEFICIT

In February, while presenting the annual budget for 2019-20, the government had revised upward its fiscal deficit target to 3.4% of GDP for 208-19 from the previously estimated 3.3% budgeted target.

As per Provisional Actuals for 2018-19, fiscal deficit stood at 3.4% of GDP. In 2018-19, direct taxes grew by 13.4% on the back of improved performance of corporate tax. However, indirect taxes fell short of budget estimates by about 16%, following a shortfall in GST revenues (including CGST, IGST and compensation cess) as compared to the budget estimates.

Government stood by its path of fiscal consolidation in 2018-19. The new targeting framework rests on two pillars – reducing debt and fiscal consolidation. The Survey lauds the government effort on both the accounts: consolidation of revenue expenditure with tilt towards capital expenditure and progressive reduction in primary and fiscal deficit.

GDP GROWTH

In the backdrop of the world output growth declining from 3.8% in 2017 to 3.6% in 2018, India continues to remain the fastest growing major economy. There is a slight moderation in GDP growth from 7.2% in 2017-18 to 6.8% in 2018-19.

Growth momentum moderation is attributable to lower growth in ‘Agriculture & allied’, ‘Trade, hotel, transport, storage, communication and services related to broadcasting’ and ‘Public administration & defence’ sectors’.

Moderation in GDP growth was experienced in all four quarters of 2018-19 with the fourth quarter registering

a growth of 5.8%. Explaining the low growth in the last quarter, attention has been drawn to the base effect arising from high growth to 8.1% in fourth quarter of 2017-18 and election related uncertainty.

On the demand side, the decline in GDP growth arose primarily due to deceleration in private final consumption in final two quarters. Deceleration is attributed to low farm incomes in rural areas arising from low food prices and due to stress in NBFCs affecting lending.

GDP growth for the year 2019-20 is projected at 7%, reflecting a recovery in the economy after a deceleration in the growth momentum throughout 2018-19.

AGRICULTURAL AND ALLIED ACTIVITIES

Agriculture sector in India goes through cyclical movement in terms of growth. The GVA in agriculture improved from negative 0.2% in 2014-15 to 6.3% in 2016-17 and again decelerated to 2.9% in 2018-19.

While crops, livestock and forestry sector showed fluctuating growth rates over the period from 2014-15 to 2017-18, the fisheries sector has shown growth from 4.9% in 2012-13 to 11.9% in 2017-18.

89% of the groundwater extracted is used for irrigation and crops such as paddy and sugarcane consume more than 60% of the irrigation water. Focus should shift from land productivity to irrigation water productivity. Stress should be on devising policies to incentivize farmers to improve water use and thrust should be on micro-irrigation that can improve water use efficiency.

Attention is also drawn to the Global Food Security Index, where India’s overall Food Security Score is 50.1 out of 100 and ranks India 76 out of 113 countries. This reflects the need for India to further improve the management of food supply in various aspects. Rationalisation of food subsidy and greater use of technology in food management to ensure food security for all has been recommended.

INTRODUCTION

The Survey carries the vision laid down by the Hon’ble Prime Minister for India to become a USD 5 trillion economy by 2025. In order to attain the goal of becoming a USD 5 trillion economy, India needs to sustain a real GDP growth rate of 8%.

The Survey lauded the progress made by the economy in the last five years from 2014-2018: the economy became sixth largest economy by sustaining growth rates higher than China and becoming the fastest growing major economy of the world. For 2018-19, an optimistic picture of the Indian economy is painted wherein, GDP is projected to grow at the rate of 7% against a five-year low of 6.8% the previous year.

With foundation laid over the last five years, the Survey mentions that the Indian economy is ready to shift gears so that economic growth, jobs and exports can be pushed up to the next level.

Mr. Krishnamurthy Subramanian, chief economic advisor (CEA) of the Government of India, said that high growth rates have only been sustained by a growth model driven by virtuous cycle of savings, investment and exports catalysed and supported by a favourable demographic phase.

The Survey makes case for investment as the “key driver” that can create a self-sustaining virtuous cycle in India – the investment can be government investment in infrastructure and private investment. The Survey discusses the model of China which relied primarily on savings and investment with consumption decreasing significantly as a share of GDP.

For the demand for the excess capacity created by share of consumption in GDP constrained by high level of savings, Mr. Subramanian recommends a renewed focus on pushing up exports.

Having set out the broad strategy of achieving the USD 5 trillion economy, the Survey suggests constant re-calibration of policies to achieve the goal. Stress is laid on data-driven evidences for such re-calibration and framework is laid out

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INDUSTRIAL, CORPORATE, AND INFRASTRUCTURE PERFORMANCE

The industrial growth rate in terms of IIP during 2018-19 stood at 3.6% as compared to 4.4% growth rate in 2017-18. The moderation in 2018-19 has been mainly due to subdued manufacturing activities in Q3 and Q4 due to slower credit flow to medium and small industries, reduced lending by NBFCs owing to liquidity crunch, tapering of domestic demand for key sectors such as automotive sector, pharmaceuticals, and machinery and equipment, volatility in international crude oil prices etc.

Meanwhile, the eight-core infrastructure supportive industries have achieved the overall growth rate of 4.3% during 2018-19 like the increase achieved in 2017-18.

Government’s initiative has been appreciated for several measures in crucial sectors to accelerate higher manufacturing growth such as Start-up India, Ease of doing Business, Make in India, Foreign Direct Investment Policy reforms. India has considerably improved its ranking to 77th position in 2018 among 190 countries assessed by the World Bank Doing Business Report, 2019 in which India has leapt 23 ranks over its rank of 100 in 2017. A robust and resilient Infrastructure is fundamental and essential for budding industries. While India has invested in its infrastructure over the years, the challenge is to mobilize adequate investment in infrastructure sector which runs into several trillions of dollars. The investment gaps in the infrastructure would have to be addressed through various innovative approaches with the collaboration of both public and private sector.

SERVICES SECTOR

The services sector accounts for 54% of India’s GVA. Its growth rate moderated to 7.5% in 2018-19 from 8.1% in 2017- 18.

The segments that saw deceleration are tourism, trade, hotels, transport, communication and services related to broadcasting, public administration and

defence. Financial, real estate and professional services category accelerated. An important finding is that India’s services sector does not generate jobs in proportion to its share in GVA. This contrasts with the international experience.

India received 10.6 million foreign tourists in 2018-19 compared to 10.4 million in 2017-18. Foreign exchange earnings from tourism in India stood at USD 27.7 billion in 2018-19 compared to USD 28.7 billion in 2017-18. Many of the high frequency indicators, such as bank credit to services sector, decelerated in 2018-19. However, the IT-BPM industry grew by 8.4% in 2017-18 to US$167 billion and is estimated to have reached US$181 billion in 2018-19.

STOCK MARKETS

S&P BSE Sensex, the benchmark index of BSE, closed at 38,673 on March 31, 2019, witnessing an increase of 17.3% from its closing value of 32,969 as on March 31, 2018. During this period, S&P BSE Sensex closed its highest level of 38,897 on August 28, 2018 and its lowest of 33,019 on April 04, 2018. In addition, Nifty 50, the benchmark index of NSE closed at 11,624 on March 31, 2019, witnessing a gain of 14.9% from its closing value of 10,114 as on March 31, 2018. During the period Nifty 50 closed at its highest value of 11,739 on August 28,2018 and its lowest level of 10,030 on October 26, 2018.

In 2019-20, the Sensex crossed 40,000 for the first time on 3rd June and closed at 40,268. As on 10 June, 2019, the Sensex closed at 39,785 whereas Nifty closed at 11,923.

INFLATION

The average inflation in the period 2014-2018 was less than half the inflation level of the preceedings five years. Headline inflation based on the CPI-C has been declining continuously for the last five years – headline CPI inflation declined to 3.4% in 2018-19 from 3.6% in 2017-18, 4.5% in 2016-17, 4.9% in 2015-16 and 5.9% in

2014-15. It stood at 2.9% in April 2019 as compared to 4.6% in April 2018. The inflation over this period infact matched the lowest levels attained in the country’s post-independence history.

Food based inflation on CFPI declined to a low of 0.1% during the financial year 2018-19.

Inflation based on WPI remained moderate to 3% in 2017-18 compared to 1.7% in 2016-17, (-) 3.7% in 2015-16 and 1.2% in 2014-15. During the financial year 2018-19, WPI stood at 4.3%.

At the all India level, CPI-C inflation during the financial year 2018-19 was driven by miscellaneous group followed by housing as well as fuel and light group.

FOREIGN EXCHANGE RESERVES

The foreign exchange reserves in nominal terms (including the valuation effects) decreased by USD 11.6 billion at end-March 2019 over end-March 2018. Within the year, foreign exchange reserves were declining until October 2018 due to RBI’s intervention to modulate exchange rate volatility. India’s foreign exchange reserves continue to be comfortably placed at US$ 422.2 billion, as on 14th June 2019.

EXCHANGE RATE

The Indian rupee was one of the least volatile emerging market currencies during 2017-18 and traded in the range of 63.63 to 65.08 per US$. During 2018-19, Indian rupee traded with a depreciating trend against US dollar and touched a historical low of 74.4 per US$ (reference rate) on October 11, 2018 before recovering by 4.1% to 69.2 per US$ on March 29, 2019

The exchange rate in 2018-19 has been more volatile than in the previous year, mainly due to volatility in crude prices, but not much due to net portfolio flows

The Real Effective Exchange Rate also depreciated in 2018-19, making India’s exports potentially more competitive. The income terms of trade, a metric that

measures the purchasing power to import, has been on a rising trend, possibly because the growth of crude prices has still not exceeded the growth of India’s export prices.

EXTERNAL TRADE

In 2018-19, petroleum products continued to be the largest exported commodity, in value terms, with a share of 14.1% in the country’s export basket. Other major exports included pearls, precious, semi-precious stones as also gold and other precious metal jewellery besides drug formulations, biologicals. However, it was exports of organic chemicals which grew the highest at 30.6% in 2018-19.

India’s largest export destination country continues to be the United States of America, which accounted for 16%of India’s exports (in value terms) in 2018-19, followed by United Arab Emirates, China and Hong Kong. However, in 2018-19, growth of India’s exports to the Netherlands was the highest (40.7%), followed by China (25.6%) and Nepal (17.4%).

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In the import basket of 2018-19, petroleum: crude, at 22.2% had the largest share followed by gold and other precious metal jewellery at 6.4% and pearls precious/semi-precious stones at 5.3%. Electronics components grew the fastest at 54.6% in 2018-19, followed by petroleum: crude and iron and steel.

China continues to be the largest source of imports of India accounting for 13.7% of the total imported value in 2018-19. The other important sources from which India imports are the USA, UAE and Saudi Arabia. In terms of growth rates, imports from Singapore grew the highest at 118.1% in 2018-19, followed by Hong- Kong (68.5%) and UAE (37.0%).

ECONOMIC SURVEY – ISSUES AND PRIORITY

The reason for the light blue colour of the Survey is explained to be the team guided by a ‘blue sky’ thought process – an unfettered approach to thinking about appropriate economic model for India.

The approach is much needed to attain the goal of

becoming a USD 5trillion economy. India needs to get into a “virtuous circle” of fast growth, rising investment and savings and soaring exports to enable the animal spirit in the economy to thrive.

To achieve the growth rate of 8%, exports need to grow in double digits. The world economy is facing headwinds from ani-globalisation sentiments, protectionism and trade wars, and to achieve double digits export growth in this backdrop is going to be a daunting task. That said, it’s not going to be impossible especially as supply chains are moving out of China in anticipation of protracted trade war and looking for alternative destinations.

A number of reforms are required to put Indian economy to the trajectory of high growth: fix an ailing financial sector to ensure credit efficiently allocated, ensuring firms grow at rapid pace (the concept of “Nourishing Dwarfs to Become Giants” has been advocated in the Survey) and increasing public infrastructure.

India also needs to become an attractive business destination and improve the ease of setting up and doing business here. A significant constraint to ease of doing business in India is ability to enforce contracts and resolve disputes. 35 million cases pending in the judicial system speaks volume about the requirement to ramp up capacity in the lower judiciary. The Survey shows that 2,279 additional judges in lower courts and 93 in high courts would be enough to reach 100% clearance at even current productivity levels.

Another key area that requires attention is policy certainty. Global headwinds are certainly beyond the control of the government, but policymakers need to double down on reducing domestic economic policy uncertainty because it dampens investment growth. This goes a long way in making an economy attractive for investment and attracts more investment both domestic and foreign.

Though the global economy showed deceleration in the last five years, the Indian economy has done well in the last five years; inflation remained at manageable levels, physical infrastructure improved. With the foundation laid by a healthy economy, the goal of #Economy@5trillion looks achievable.

0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 9.00%

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Electricity, Gas, etc.

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-300.00 -200.00 -100.00 - 100.00 200.00 300.00 400.00 500.00 600.00

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FDI

FOREIGN INVESTMENT (USD Billion)

ExPORTS, IMPORTS & TRADE BALANCE(USD Billion)

WPI INFLATION

GROWTH IN SERVICES (New Series - Constant 2011-12 prices) FOREIGN ExCHANGE RESERVES (US$ Billion)

Growth Rate

* Apr-Dec

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DIRECT TAX• DividendDistributionTax/IncomeDistributionTax

There are no changes in the tax rates.

• SecuritiesTransactionTax


• CommoditiesTransactionTax


• Surcharge

Ʈ In the case of co-operative societies, firms and local authorities Surcharge shall continue to be levied at 12% where the income exceeds a sum of INR 10 Mn.

Ʈ In case of domestic company surcharge shall continue to be levied as follows:

Income (INR) Rate %Exceeding 10 Mn but not exceeding 100 Mn

7% of total tax

Exceeding 100 Mn 12% of total tax

Ʈ In case of other than domestic company surcharge shall continue to be levied as follows:


2% of total tax


• HealthandEducationcess

In addition to above income tax and surcharge, “Health and Education Cess” shall continue to be levied @ 4% on the aggregate of income tax and surcharge

PERSONALTAXIncentives to National Pension System (NPS) subscribers:

At present, any payment from NPS trust to Assessee on account of closure or opting out of the pension scheme is exempt upto 40% and the rest is taxable. With a view to enable the pensioner to have more disposable funds, it is proposed to increase the above exemption to 60%.

Any contribution made by Central government/employer to the account of employee is available to the deduction under section 80CCD to the extent of 10% of his salary. In order to ensure that central government’s employees get full deduction of enhanced contribution, it is proposed to increase the limit from 10% to 14% of contribution made by Central Government.

TAX RATES• Personaltaxrates

The personal tax rates for the financial year 2019-20 (assessment year 2020-21) are as follows -

Ʈ Personal tax rates (for all Individuals, HUF, AOP and BOI)

Income (INR) Rate %Upto 250,000 NIL250,001 to 500,000 5500,001 to 1,000,000 20Above 1,000,000 30

Ʈ Personal tax rates (for all Individuals who are at least sixty years of age but less than eighty years of age at any time during the previous year)

Income (INR) Rate %Upto 3,00,000 NIL3,00,000 to 500,000 5500,001 to 1,000,000 20Above 1,000,000 30

Ʈ Personal tax rates (for all Individuals who are eighty years of age at any time during the previous year)

Income (INR) Rate %Upto 5,00,000 NIL500,001 to 1,000,000 20Above 1,000,000 30

• SurchargeonIndividuals

Ʈ In the case of an Individual, HUF, AOP & BOI, surcharge shall be levied if:


10% of total tax

Exceeding 10 Mn but not exceeding 20 Mn

15% of total tax

Exceeding 20 Mn but not exceeding 50 Mn

25% of total tax


• Corporatetaxrates

In case of a domestic company, if the total turnover or gross receipts of the company in the previous year 2017-18 do not exceed INR 4 Billion the rate of Income-tax shall be 25% of the total income and in all other cases the same shall be 30% of the total income.

• CooperativeSocieties/Firms/LocalAuthorities


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etc. paid in arrears or in advance.

These amendments will take effect retrospectively from April 1, 2007 and will, accordingly, apply in relation to the assessment year 2007-08 and subsequent assessment years.

Extension of Tax deducted at source (‘TDS’) on payment made by Individual/ HUF to contractors and professionals

At present, there is no liability to deduct TDS under Section 194C and 194J of the Act, if any payment made by individual/HUF to the resident contractor or professional when it is for personal use or where they are not subject to audit.

Now, it is proposed to insert a new Section 194M in the Act to provide for levy of TDS @ 5% where the sum paid or credited in a year on account of contractual work or professional fees exceeds INR 5 Million in a year.

Further, in order to reduce the burden, it is proposed that such individual or HUF shall be able to deposit the tax deducted using PAN and shall not be required to obtain TAN.

This amendment will take effect from September 1, 2019.

TDS on non-exempt portion of life insurance pay out on net basis

It is proposed to amend the Section 194DA of the Act, to provide for tax deduction at source @5% on the income component instead of gross amount (i.e. after deducting the amount of insurance premium paid by the assessee from the total sum received) of the sum paid by the insurer.

This amendment will be effective from September 1, 2019.

Tax deducted at source (‘TDS’) at the time of purchase of immovable property

It is proposed to amend the explanation to Section 194-IA of the Act and provide that the term “consideration” of immovable property shall include all

the other types of payments such as club membership fees, car parking fees, electricity and water facility fees, etc. or any other charges of similar nature made beside the sales consideration, which are incidental to transfer of immovable property and the buyer is contractually bound to make such payment


Claim of losses is provided to investors in cases of Category I and Category II Alternative Investment Fund (AIF)

As per Section 115UB of the Act, income earned by the Category I and II AIF, except for business income which is taxed at AIF level, pass through of profits (other than profit & gains from business) has been allowed to individual investors so as to give them benefit of lower rate of tax, if applicable. However, pass through of losses are not provided under the existing regime and are retained at AIF level to be carried forward and set off in accordance with Chapter VI.

In order to remove the genuine difficulty faced by Category I and II AIFs, it is proposed to amend Section 115UB to provide that:

• the business loss of the investment fund, if any, shall be allowed to be carried forward and set-off in accordance with the provisions of Chapter VI and shall not be passed onto the unit holder;

• the loss other than business loss, if any, shall also be ignored for the purposes of pass through to its unit holders, if such loss has arisen in respect of a unit which has not been held by the unit holder for a period of at least twelve months;

• the loss other than business loss, if any, accumulated at the level of investment fund as on 31st March, 2019, shall be deemed to be the loss of a unit holder who held the unit on 31st March, 2019 in respect of the investments made by him in the investment fund and allowed to be carried forward for the remaining period calculated from the year in which the loss had occurred for the first time taking

In order give more tax savings options to central government’s employees, it is proposed to amend Section 80C, so as to provide that the any amount paid by central government’s employees to his tier-II account of pension scheme shall be eligible for deduction under the said section.

This amendment will take effect from April 1, 2020 and will, accordingly, apply in relation to the assessment year 2020-21 and subsequent assessment years.

Provision of credit of relief provided under section 89

In order to remove this genuine hardship, it is proposed to amend section 140A, section 143, section 234A, section 234B and section 234C, so as to provide that computation of tax liability shall be made after allowing tax relief under section 89 in respect of salary,

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that year as the first year and set-off by him in accordance with the provisions of Chapter VI;

• the loss so deemed in the hands of unit holders shall not be available to the investment fund for the purposes of chapter VI.

These amendments will take effect from the April 01, 2020 and will, accordingly, apply in relation to the assessment year 2020-21 and subsequent assessment years.

Deduction under section 80EEB of the Act for interest on loan taken for purchase of electric vehicle

It has been proposed to insert a new section 80EEB in the Act to provide for deduction in respect of interest on loan taken for purchase of an electric vehicle from any financial institution up to INR 150,000. The said deduction shall be subject to the following conditions:

• the loan has been sanctioned by a financial institution including a non-banking financial company during the period beginning on the April 1, 2019 to March 31, 2023;

• the assessee does not own any other electric vehicle on the date of sanction of loan.

It is also proposed that where a deduction under said section is allowed for any interest, deduction shall not be allowed in respect of such interest under any other provisions of the Act for the same or any other assessment year.

This amendment will take effect from April 1, 2020 and will, accordingly, apply in relation to assessment year 2020-21 and subsequent assessment years.

Deduction under section 80EEA for interest on loan taken for residential house property

In order to provide further impetus to affordable housing, it is proposed to insert a new section 80EEA

in the Act for deduction of INR 150,000 on interest paid on loans borrowed for residential house property from any financial institution. The said deduction shall be subject to the following conditions:

• loan has been sanctioned by a financial institution during the period beginning on the April 1, 2019 to March 31, 2020;

• the stamp duty value of house property does not exceed INR 4.5 Million;

• assessee does not own any residential house property on the date of sanction of loan.

This shall be in addition to the existing interest deduction of INR 250,000.

It is also proposed that where a deduction under said section is allowed for any interest, deduction shall not be allowed in respect of such interest under any other provisions of the Act for the same or any other assessment year.


Inter-changeability of PAN & Aadhaar and mandatory quoting of PAN

Under the existing provisions of Section 139A of the Act, every person specified therein, who has not been allotted a PAN, shall apply to the Assessing Officer for allotment of PAN.

In order to ensure ease of compliance, it is proposed to provide for inter-changeability of PAN with Aadhaar number. Accordingly, provisions of section 139A of the

Act are proposed to be amended so as to provide that:

• every person who is required to furnish or intimate or quote his PAN under the Act, and who, has not been allotted a PAN but possesses the Aadhaar number, may furnish or intimate or quote his Aadhaar number in lieu of PAN, and such person shall be allotted a PAN in the prescribed manner;

• every person who has been allotted a PAN, and who has linked his Aadhaar number under section 139AA of the Act, may furnish or intimate or quote his Aadhaar number in lieu of a PAN.

Further, it is proposed to insert a new sub-section (6A) in section 139A of the Act to ensure quoting of PAN or Aadhaar number for entering into prescribed transactions and authentication thereof in the prescribed manner. Duty is also proposed to be cast upon the receiver of the document relating to such transactions to ensure its authentication.

In order to ensure due compliance relating to quoting and authentication of PAN, penalty provisions under Section 272B of the Act is proposed to be amended suitably.

These amendments shall be applicable from September 1, 2019.

It is also proposed to consider issuing Aadhaar Card

for Non-Resident Indians with Indian Passports after their arrival in India without waiting for 180 days.

Consequence of not linking PAN with Aadhaar

Currently, Section 139AA of the Act provides that PAN allotted to a person shall be deemed to be invalid, in case the person fails to intimate the Aadhaar number, on or before the notified date.

It is proposed to amend the said proviso so as to provide that if a person fails to intimate the Aadhaar number, the PAN allotted to such person shall be made inoperative in the prescribed manner.


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Pre-filling of Income-tax Returns

To ensure ease of filing the return, pre-filled tax returns will be made available to taxpayers which will comprise details of salary income, capital gains from securities, bank interests, and dividends etc. and tax deductions. Information regarding these incomes will be collected from the concerned sources such as Banks, Stock exchanges, mutual funds, EPFO, State Registration Departments etc.

Mandatory furnishing of return of income by certain persons

Under the existing provisions of the Act, an individual or HUF is required to furnish return of income only if income exceeds maximum amount not chargeable to tax, subject to certain exceptions.

It is proposed to amend Section 139 of the Act so as to provide that a person shall be mandatorily required to furnish return of income if he has entered into following transactions during the previous year:

• deposited an amount or aggregate of the amounts exceeding INR 10 Million in one or more current account maintained with a banking company or a co-operative bank; or

• has incurred expenditure of an amount or aggregate of the amounts exceeding INR 200,000 for himself or any other person for travel to a foreign country; or

• has incurred expenditure of an amount or aggregate of the amounts exceeding INR 100,000 towards consumption of electricity; or

• fulfils such other prescribed conditions, as may be prescribed.

Further, as per the existing provisions, a person claiming rollover benefit of exemption under section 54, 54B, 54D, 54EC, 54F, 54G, 54GA and 54GB of the Act for investment in a house, bond or other assets is not required to furnish return of income if after claim of such rollover benefits, his total income is not more than the maximum amount not chargeable to tax.

It is proposed to include such persons claiming rollover benefit of exemption under the aforesaid sections of the Act to mandatory furnish return of income if his total income is more than the maximum

amount not chargeable to tax before claiming the rollover benefit.


TAXATIONOFNON-RESIDENTSDeemed accrual of gift made to a person outside India

Section 9 of the Act relates to Income deemed to accrue or arise in India. As per the said Section, non- residents are taxable in India in respect of income that accrues or arises in India or is received in India or is deemed to accrue or arise in India or is deemed to be received in India. Presently, gift of money or property made by a resident to another resident are liable for income tax subject to certain exemptions under Section 56(2)(x) of the Act. It is proposed to amend Section 2(24) (xviia) of the Act to provide that income arising from any sum of money paid, or property situated in India transferred, on or after July 5, 2019 by a person resident in India to a person outside India, shall be deemed to accrue or arise in India. In case where DTAA is available, the relevant article of applicable DTAA shall continue to apply for such gifts as well.


Exemption of interest income of a non-resident arising from borrowings by way of issue of Rupee Denominated Bonds (‘RDB’) referred to under Section 194LC

In order to incentivise low cost foreign borrowings through Off-shore RBD, the Government vide press release dated September 17, 2018 provided for exemption of interest income earned by non-resident from RDB issued by a company or a business trust, outside India, during the period September 17, 2018 to March 31, 2019. Consequently, no tax was required to be deducted on the payment of interest in respect of the said bond. It is proposed to incorporate the said tax incentive in Section 194LC of the Act.

This amendment will take effect from April 1, 2019 and

will, accordingly, apply in relation to assessment year 2019-2020 and subsequent assessment years.

Online filing of application seeking determination of tax to be deducted at source on payment to non-residents

It is proposed to provide for online filing of application to obtain certificate or order from the Assessing Officer for lower or NIL withholding-tax by a person making a payment to a non-resident seeking determination of tax to be deducted at source under Section 195(2) of the Act which will also aid in tax administration in monitoring such payments.

Similar amendment is also proposed to be made in Section 195(7) of the Act which are applicable to specified class of persons or cases.

These amendments will take effect from November 1, 2019.

Electronic filing of statement of transactions on which tax has not been deducted

At present, Section 206A of the Act provides for filing of statement in respect of transactions from which tax has not been deducted at source on a floppy, diskette, magnetic tape, CD-ROM, or any other computer readable media. It is proposed to enable e-filing of such statement in prescribed form in the prescribed manner. Further, correction of such statements for rectification of any mistake or to add, delete or update the information furnished is also provided.


Relaxation in conditions of special taxation regime for offshore funds

Section 9A of the Act provides for a safe harbour in respect of offshore funds. It provides that in the case of an eligible investment fund, the fund management activity carried out through an eligible fund manager located in India and acting on behalf of such fund shall

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by itself not constitute business connection in India of the said fund. Further, an eligible investment fund shall not said to be resident in India merely because the eligible fund manager undertaking fund management activities on its behalf is located in India. The said benefit under Section 9A is available subject to certain conditions as provided in the sub-sections.

In order to give impetus to fund management activities in India, it is proposed to amend Section 9A of the Act to provide that:

• the corpus of the fund shall not be less than INR 1 Billion at the end of a period of 6 months from the end of the month of its establishment or incorporation or at the end of such previous year, whichever is later; and

• the remuneration paid by the fund to an eligible fund manager in respect of fund management activity undertaken by him on its behalf is not less than the amount calculated in such manner as may be prescribed.

These amendments will take effect retrospectively from April 1, 2019 and shall apply to the assessment year 2019-20 and subsequent assessment years.

Rationalisation of provision relating recovery of tax in pursuance of agreements with foreign countries

In order to provide assistance in recovery of tax as per treaty obligation with the other country, it is proposed to provide for tax recoveries where details of property of the persons are not available, however, the said person is a resident in India. Further, amendment has been proposed for tax recovery where details of

property of an assessee in default under the Act are not available but the said assessee is a resident in a foreign country.

These amendments will take effect from September 1, 2019.

STARTUPS Relaxation of conditions for carry forward and set off of losses for start-ups

Section 79 of the Act provides conditions for carry forward and set off of losses in case of a company not being a company in which the public are substantially interested. Clause (a) of the section applies to all such companies, except an eligible start-up as referred to in section 80-IAC, while clause (b) applies only to such eligible start-up.

Under clause (a), no loss incurred in any year prior to the previous year shall be carried forward and set off against the income of the previous year, unless on the last day of the previous year, the shares of the company carrying not less than 51% of the voting power were beneficially held by persons who beneficially held shares of the company carrying not less than 51% of the voting power on the last day of the year or years in which the loss was incurred.

Under clause (b), the loss incurred in any year prior to the previous year shall be carried forward and set off against the income of the previous year, if, all the shareholders of such company who held shares carrying voting power on the last day of the year or years in which the loss was incurred, continue to hold those shares on the last day of such previous year and such loss has been incurred during the period of 7 years beginning from the year in which such company is incorporated.

In order to further facilitate ease of doing business in the case of an eligible start-up, it is proposed to amend the provisions of section 79 to provide that loss incurred in any year prior to the previous year, in the case of closely held eligible start-up, shall be allowed to be carried forward and set off against the income of the previous year on satisfaction of either of the two conditions stipulated currently at clause (a) or clause (b).

For other closely held companies, there would be no change, and loss incurred in any year prior to the previous year shall be carried forward and set off only on satisfaction of condition currently provided at clause (a).

Capital gains exemption from sale of residential house for investment in start-ups

At present, Section 54GB of the Act provides for roll over benefit in respect of capital gain arising from the transfer of a long-term capital asset,

being a residential property owned by the eligible assessee. The assessee is required to utilise the net consideration for subscription in the equity shares of an eligible company before the due date of filing of the return of income. The assessee is required to have more than 50% share capital or more than 50% voting rights after the subscription in shares in the eligible company. The said section puts restriction on transfer of assets acquired by the company for 5 years from the date of acquisition.

Currently, the benefit of said section was only available for investment in the equity shares of eligible start-ups, the period for which got over on March 31, 2019. Thus, no benefit was available for residential property transferred after March 31, 2019.

In order to incentivise investment in eligible start-ups, following amendments have been proposed in the said section:

• extend the sun set date of transfer of residential property for investment in eligible start-ups from March 31, 2019 to March 31, 2021;

• relax the condition of minimum shareholding of 50% of share capital or voting rights to 25%;

• relax the condition restricting transfer of new asset being computer or computer software from the existing 5 years to 3 years.


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Compliance with the notification of exemption for Startups u/s 56(2)(viib)

In order to ensure compliance to the conditions specified in the notification issued by Central Government, it has been proposed that in case of failure to comply with the conditions specified therein, the consideration received for issue of shares exceeding the face value of such shares shall be deemed to be the income of the company chargeable to income-tax for the previous year in which the failure to comply with any of the said conditions has taken place.

These amendments will take effect from April 1, 2020 and will, accordingly, apply in relation to the assessment year 2020-21 and subsequent assessment years.

Angel Tax Relief

• No scrutiny in respect of valuation of share premiums for start-ups and their investors who file requisite declarations and provide information in their returns.

• With e-verification for establishing identity of investors and source of funds, funds raised by start-ups will not require any kind of scrutiny from the Income Tax Department.

• No inquiry or verification will be done in the pending assessments by Assessing Officers without obtaining supervisory approval.

CORPORATE&BUSINESSTAXATIONIncentives proposed for an International Financial Services Centre (‘IFSC’):

In order to promote the development of IFSC, following additional benefits are proposed:

• As per the existing provisions of section 47 of the Act, any transfer of specified securities by a non-resident through a recognised stock exchange located in the IFSC and where the consideration for such transaction is paid/payable in foreign currency is not regarded as transfer. This benefit is proposed to be extended to transfer of certain securities by Category-III Alternative Investment Fund (AIF) in IFSC of which all the unit holders are non-residents, subject to fulfilment of specified conditions.

• Section 10 of the Act to provide tax exemptions for interest received by a non-resident in respect of monies lent to a unit located in IFSC on or after September 1, 2019.

• Currently, a unit in the IFSC is allowed deduction of 100% of profits for first 5 consecutive years and 50% for next 5 consecutive years from the year of commencement under section 80LA of the Act. It is proposed to provide for 100% deduction for 10 consecutive years and also to provide that the unit may claim the said deduction for any 10 consecutive years out of 15 years from the year of commencement at the option of the assessee.

• It is proposed to allow deduction under section 80LA of the Act to a non-resident for the purpose of computing tax liability in respect of income of the nature of interest, dividend, royalty and fees for technical services etc. as referred to in section 115A of the Act.

These amendments will take effect from April 1, 2020 and will, accordingly, apply in relation to assessment year 2020-21 and subsequent assessment years.

• Presently, Dividend Distribution Tax (‘DDT’) is not levied on the distribution of dividend under section 115-O of the Act by a company located in IFSC if the same is distributed out of current income. It is proposed to

extend the said benefit of exemption to distribution of dividend out of accumulated income by the unit after April 1, 2017 from operations in IFSC.

• Presently, any amount of income distributed by the specified company or a Mutual Fund to its unit holders under section 115R of the Act shall be chargeable to tax and such specified company or Mutual Fund shall be liable to pay additional income-tax on such distributed income. In order to facilitate setting up of mutual funds in the IFSC, it is proposed that there would be no additional tax on distribution of any amount out of income derived from transactions made on a recognised stock exchange located in any IFSC under the said section on or after September 1, 2019, wherein all the unit holders are non-residents and also fulfil certain other specified conditions.


Category II AIF exempted from the anti-abuse provisions of Section 56 of the Act

The existing provisions of the Section 56(2) (viib) of the Act provide that where a company, not being a company in which the public are substantially interested, receives, in any previous year, from any person being a resident, any consideration for issue of shares that exceeds the face value of such shares, the aggregate consideration received for such shares as exceeds the fair market value of the shares shall be charged to tax. However, exemption from said provision has been provided for the consideration for issue of shares received-

• by a venture capital undertaking from a venture capital company or a venture capital fund; or

• by a company from a class or classes of persons as may be notified by the Central Government in this behalf.

Presently, the investment made by Category-I AIF is exempted from the applicability of the provisions of section 56(2)(viib) of the Income-tax Act. It is proposed to extend this exemption to Category-II AIF as well.


Facilitating demerger of Ind-AS compliant companies

In order to remove the difficulties faced by resulting company in case of demergers due to Ind-AS, it is proposed to amend Section 2 of the Act to provide that the requirement of recording property and liabilities at book value by the resulting company shall not be applicable in a case where the property and liabilities of the undertakings received by it are recorded at a value different from the value appearing in the books of account of the demerged company immediately before the demerger in compliance to the Indian Accounting Standards.

This amendment will take effect from April 1, 2020.

Tax on share-buyback by listed companies

Presently, Section 115QA of the Act provides for levy of additional Income-tax at the rate of 20% of the distributed income on account of buy-back of unlisted shares by the company.

It is proposed to extend the taxability pertaining to buy back of shares to all the companies including listed companies. Thus, any buy back of shares from a shareholder by a company listed on recognised stock exchange, on or after July 5, 2019, shall also be covered by the provision of Section 115QA of the Act.

Accordingly, it is also proposed to extend exemption under clause (34A) of Section 10 of the Act to shareholders of the listed company on account of buy-back of shares on which additional income -tax has been paid by the company.

These amendments will take effect from July 05, 2019.

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Taxability of interest received by Non-Banking Finance Companies (NBFCs)

At present, Section 43D of the Act provides that interest income in relation to certain categories of bad or doubtful debts received by certain institutions or banks or corporations or companies, shall be chargeable to tax in the previous year in which it is credited to its profit and loss account actually received, whichever is earlier.

The benefit of this provision is presently available to public financial institutions, scheduled banks, cooperative banks, State financial corporations, State industrial investment corporations and public companies like housing finance companies.

In order to provide symmetry to certain categories of NBFCs who are adequately regulated, it is proposed to amend Section 43D of the Act, so as to include deposit-taking NBFCs and systemically important non deposit-taking NBFCs within the scope of this Section.

Consequentially, as per matching principle, Section 43B of the Act is to be amended to provide that any sum payable by the assessee as interest on any loan or advances from a deposit-taking NBFCs and systemically important non deposit-taking NBFCs shall be allowed as deduction if it is actually paid on or before the due date of furnishing the return of income of the relevant previous year.

These amendments will take effect from April 01, 2020 and will, accordingly, apply in relation to the assessment year 2020-21 and subsequent years.

Exemption for certain transactions from deeming fiction of fair market value of shares

Currently, Section 56(2)(x) and 50CA of the Act, the fair market value of unlisted shares is determined based on the prescribed method for the purpose of taxation. However, the provisions of Section 56(2)(x) are not applicable to certain specified transactions while, no such exemption is available under Section 50CA (computation of capital gains on transfer of unlisted shares).

In order to provide relief to transactions from the applicability of Sections 56(2)(x) and 50CA wherein consideration for transfer of shares is approved by

certain authorities, it has been proposed to empower the Board to prescribe transactions undertaken by certain class of persons to which the said provisions shall not be applicable.

These amendments will take effect from April 01, 2020 and will, accordingly, apply in relation to the assessment year 2020-21 and subsequent assessment years.

Relaxation in TDS provisions for payment made to non-residents

At present, first proviso to sub-section (1) of Section 201 provides that the deductor shall not be deemed to be an assessee in default if he fails to deduct tax on a payment made to a resident, if such resident has furnished his return of income under Section 139, disclosed such payment for computing his income in his return of income. This proviso was applicable to resident deductees only.

To remove the anomaly, it is proposed to extend the said relief to non-resident deductees. Thus, deductor shall not be deemed to be an assessee in default if all the conditions of aforementioned proviso have been fulfilled by non- resident deductee.

Consequently, proviso to sub-section (1A) of Section 201 is also proposed to amend to provide for levy of interest till the date of filing of return by the non-resident payee.


In line with the aforesaid amendment, it is proposed to amend Section 40(a) to provide no disallowance shall be made if the assessee is not deemed to be an assessee in default in accordance with the proposed proviso to Section 201(1) of the act.

This amendment shall be effective from April 01, 2020 and will, accordingly, apply in relation to AY 2020-21 and subsequent assessment year.

Corresponding amendment in Section 115JB of the Act

Further, it is also proposed that under Section 115JB of the Act for calculating book profit, the aggregate amount of unabsorbed depreciation and loss (excluding depreciation) brought forward shall also be allowed to be reduced in case of above mentioned companies.

These amendments in Section 79 and 115JB will take effect from April 01, 2020 and will, accordingly, apply in relation to the assessment year 2020-21 and subsequent assessment years.

Tax benefits for affordable housing

Presently, Section 80-IBA of the Act, provide that where the gross total income of an assessee includes any profits and gains derived from the business of developing and building housing projects, there shall, subject to certain conditions, be allowed, a deduction of an amount equal to 100% of the profits and gains derived from such business.

With a view to align the definition of “affordable housing” under Section 80-IBA with the definition under GST Act, it is proposed to amend the said Section, so as to modify certain conditions regarding the housing project approved on or after 1st day of September, 2019. The same are as under:

• the assessee shall be eligible for deduction under the Section, in respect of a housing project if a residential unit in the housing project have carpet area not exceeding 60 square meter in metropolitan cities or 90 square meter in cities or towns other than metropolitan cities of Bengaluru, Chennai, Delhi National Capital Region (limited to Delhi, Noida, Greater Noida, Ghaziabad, Gurgaon, Faridabad), Hyderabad, Kolkata and Mumbai (whole of Mumbai Metropolitan Region); and

• the stamp duty value of such residential unit in the housing project shall not exceed INR 4.5 Million;

These amendments will take effect from April 01, 2020 and will, accordingly, apply in relation to assessment year 2020-21 and subsequent assessment years.

Facilitating resolution of distressed companies

• Restrictionincarryforwardandsetoffoflossesu/s79oftheAct

The existing provisions of Section 79 provides for carry forward and set off of losses in case of certain companies. The said provision is not applicable to a company where any change in shareholding takes place in a previous year pursuant to a resolution plan approved under the Insolvency and Bankruptcy Code, 2016 (IBC) subject to the condition that jurisdictional Principal Commissioner or Commissioner is provided a reasonable opportunity of being heard.

Thus, loss in such cases can be carried forward and set off even if there is change in voting power or shareholding. This benefit is proposed to be extended to certain companies.

It has been provided in newly substituted Section 79 that the provision of this Section shall not apply to those companies, and their subsidiary and the subsidiary of such subsidiary, where-

• the National Company Law Tribunal (NCLT) on a petition moved by the Central Government under Section 241 of the Companies Act, 2013 has suspended the Board of Directors of such company and has appointed new directors, who are nominated by the Central Government, under Section 242 of the Companies Act, 2013: and

• a change in shareholding of such company, and its subsidiaries and the subsidiary of such subsidiary, has taken place in a previous year pursuant to a resolution plan approved by NCLT under Section 242 of the Companies Act, 2013, after affording a reasonable opportunity of being heard to the jurisdictional Principal Commissioner or Commissioner.

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Measures for promoting less cash economy

• Inclusionof“otherelectronicmodeofpayments”inSection13A,35AD,40A,43CA,44AD,80JJAA,269SS,269SS,269ST&269ToftheAct

In current scenario, there are various provisions in the Act which prohibit cash transactions with prescribed threshold limits and allow/encourage payment or receipt only through account payee cheque, account payee draft or electronic clearing system through a bank account.

Therefore, in order to encourage other electronic modes of payment, it is proposed to amend the above Sections, so as to include such other electronic mode as may be prescribed, in addition to the already existing permissible modes of payment in the form of an account payee cheque or an account payee bank draft or the electronic clearing system through a bank account.

These amendments will take effect from April 01, 2020 and will, accordingly apply in relation to assessment year 2020-21 and subsequent assessment years.

Accordingly, similar changes are also proposed in Section 269SS, 269SS, 269ST & 269T of the Act with effect from September 01, 2019.

• Mandatingacceptanceofpaymentsthroughprescribedelectronicmodes

To reduce generation and circulation of black money and to promote digital economy, it is proposed to insert a new Section 269SU in the Act, so as to provide that every person, carrying on business, shall, provide facility for accepting payment through the prescribed electronic modes, in addition to the facility for other electronic modes of payment, if any, being provided by such person, if his total sales, turnover or gross receipts in business exceeds INR 50 Million during the immediately preceding previous year.

In order to ensure compliance of the aforesaid provisions, it is further proposed to insert a new Section 27IDB to provide that the failure to provide facility for electronic modes of payment prescribed under Section 269SU shall attract penalty of a sum of INR 5,000 for every day during which such failure continues.

This amendment will take effect from November 01, 2019.

Widening of scope of Statement of Financial Transaction

Section 285BA of the Act provides for furnishing of statement of financial transaction (SFT) or reportable account by person specified therein.

In order to enable pre-filling of return of income, the following amendments are proposed in the said section:

• Obtain information by widening the scope of furnishing such statements by mandating furnishing of such statement by certain prescribed persons other than those currently furnishing the same;

• Remove the current threshold of INR 50,000 on aggregate value of transactions during a financial year, for furnishing of information;

• To provide that if the defect in such statement is not rectified within the time specified therein, the provisions of the Act shall apply as if such person had furnished inaccurate information in the statement.

Further, it is also proposed to amend the penalty provisions contained in section 271FAA of the Act so as to ensure correct furnishing of information in the SFT and widen the scope of penalty to cover all the reporting entities under section 285BA of the Act.


TDS on cash withdrawal to discourage cash transaction

In order to encourage cashless economy, a new Section 194N of the Act has been inserted in the Act, to provide for levy of TDS @2% on cash payment in excess of INR 10 Million in aggregate made during the year, by a banking company or cooperative bank or post office to any person from an account maintained by the recipient.


TRANSFERPRICINGClarification on assessment proceedings by tax authorities on modified return filed post APA

It is proposed to amend Section 92CD(3) of the Act to clarify that in cases where assessment or reassessment has already been completed and modified return of income has been filed by the Taxpayer (post APA signing) under Section 92CD(1) of the Act, the Assessing Officers shall pass an order modifying only such portion of the total income of the relevant assessment year determined in such assessment or reassessment, having regard to and in accordance with the APA. Hence, the Assessing Officers cannot initiate fresh assessment/ reassessment on such modified returns as Assessing Officer’s role will be restricted to reassess merely the modifications to the total returned income in pursuance to APA. The proposed amendment will be effective from September 1, 2019.

Clarification on ‘Accounting Year’ as defined in Section 286 of the Act

In the proposed Bill, it has been clarified that in case of the ARE resident in India (of an international group), the accounting year for furnishing the CbCR with the prescribed authority shall be that of the Parent entity of the Group. Accordingly, the CbCR report shall be furnished by ARE within a period of 12 months from the end of the accounting year applicable to such Parent entity. The proposed amendment will take effect retrospectively from the April 1, 2017 and will, accordingly, apply in relation to the assessment year 2017-18 and subsequent assessment years.

Rationalisation of Secondary Adjustment under Section 92CE of the Act

It is proposed to make following amendments in Section 92CE of the Act so as to provide an option to the Taxpayer of ‘One-time settlement’ considering the practical challenges faced in implementing the same and aligning it to international best practices:

• the condition of threshold of INR 10 million and of the primary adjustment made upto assessment year

• 2016-17 are alternate conditions. Accordingly, Section 92CE of the Act will not get attracted if the primary adjustment in the previous year does not exceeds INR 10 million or the primary adjustment was made upto assessment year 2016-17;

• the Taxpayer has to compute interest on excess money to be repatriated or part thereof;

• the provision of Section 92CE of the Act shall apply to the APAs which have been signed on or after

• April 1, 2017, however, no refund of the taxes already paid till date under the pre amended section would be allowed; and

• the excess money may be repatriated from any of the associated enterprise of the Taxpayer which is not resident in India.

The above proposed amendments will take effect retrospectively from April 1, 2018 and will, accordingly, apply in relation to the assessment year 2018-19 and subsequent assessment years. Further, following amendments will be effective from September 1, 2019.

• in a case where the excess money or part thereof has not been repatriated in time, the Taxpayer will have the option to pay additional income-tax at the rate of eighteen percent on such excess money or part thereof in addition to the existing requirement of calculation of interest till the date of payment of this additional tax. The additional tax is proposed to be increased by a surcharge of twelve percent;

• the tax so paid shall be the final payment of tax and no credit shall be allowed in respect of the amount of tax so paid;

• the deduction in respect of the amount on which such tax has been paid, shall not be allowed under any other provision of this Act; and

• if the Taxpayer pays the additional income-tax, he will not be required to make secondary adjustment or compute interest from the date of payment of such tax.

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ASSESSMENTPROCEDURESFaceless e-assessment

Additional steps will be undertaken for e-assessment proceedings and reduce human intervention through random allocation of scrutiny assessments by a Central Cell, without disclosing the name, designation or location of the Assessing Officer. The Central Cell shall be the single point of contact between the taxpayer and the Department.

Rationalization of penalty provisions relating to under-reported income

It is proposed to amend Section 270A of the Act where penalty shall be imposed if the person has under-reported income and furnished his return for the first time under Section 148 of the Act.

These amendments will take effect retrospectively from April 1, 2017 and will, accordingly, apply in relation to assessment year 2017-2018 and subsequent assessment years.

• Rationalizationoftheprovisionsofsection276CCoftheact

Currently, Section 276CC of the Act provide that prosecution proceedings shall not be proceeded for failure to furnish return of income if the tax payable on the total income determined of the person, not being a company, on regular assessment does not exceed INR 3,000. Further, it also does not provide for taking into account tax collected at source and self-assessment tax for the purpose of determining the tax liability.

Following amendments are proposed to be made in Section 276CC of the Act:

• Increase the threshold limit of tax payable of INR 3,000 to INR 10,000.

• To include the self-assessment tax, if any, paid before the expiry of the assessment year, and tax collected at source for the purpose of determining tax liability.


MISCELLANEOUSConcessional rate of Short-term Capital Gains (STCG) tax to certain equity-oriented fund of funds.

In order to further incentivize funds of funds set up for disinvestment of Central Public Sector Enterprises (CPSEs), it is proposed to amend Section 111A for extend the concessional rate of tax for short-term capital gains in respect of transfer of units of such fund of funds.


Cancellation of registration of the Trust or Institution

Section 12AA of the Act prescribes for manner of granting registration and cancellation in case of charitable trust or institution for the purpose of availing exemption in respect of its income under Section 11 of the Act.

In order to ensure that the trust or institution do not deviate from their objects, it is proposed to amend Section 12AA of the Income-tax Act, so as to empower the Principal Commissioner or the Commissioner to satisfy about the compliance of the trust or institution to the requirements of any other law which is material for the purpose of achieving its objects at the time of granting registration and cancel the registration of such trust or institution after affording a reasonable opportunity of being heard if it is noticed that it has violated the requirements of any other law.

These amendments shall be effective from September 01, 2019.

Applicability of provisions of Rule 10D requirement to constituent entity even though no international transaction has been undertaken

It is proposed to substitute Section 92D of the Act, in order to provide that the information and document has to be kept and maintained by a constituent entity of an international group, and filing of required form, shall be applicable even when there is no international transaction undertaken by such constituent entity. Accordingly, the constituent entity which has not entered into international transaction with its Associated Enterprise during the prescribed financial year shall also needs to maintain information and documentation and file requisite information in form (Part A of Form 3CEAD) as prescribed in Rule 10DA of the Income Tax Rules, 1962 to the prescribed authority. The proposed amendment will take effect from the April 1, 2020 and will, accordingly, apply in relation to the assessment year 2020-21 and subsequent assessment years.

Removal of “arm’s length compliance” requirement in case of offshore funds

Section 9A of the Act provides for conditions in the implementation of regime of fund managers. These conditions, inter-alia, are related to payment of remuneration of fund manager at arm’s length. Accordingly, to give a thrust to fund management activities in India, it has been proposed to relax certain constraints with one of them being the arm’s length condition of fund manager’s remuneration to be replaced by an amount not less than the amount calculated in the manner that may be prescribed.

3938

Rationalisation of provisions relating to claim of refund.

In order to simplify the procedure for claim of refund, it is proposed to provide that every claim for refund shall be made by furnishing return in accordance with the provisions of Section 139 of the Act.


Enhancing time limitation for sale of attached property under rule 68B of the Second Schedule of the Act

At present, provisions of rule 68B of the Second Schedule of the Act provides that no sale of immovable property attached towards the recovery of tax, penalty etc. shall be made after the expiry of 3 years from the end of the financial year in which the order in consequence of which any tax, penalty etc. becomes final.

In order to protect the interest of the revenue, it is proposed to extend the period of limitation from 3 years to 7 years, especially in those cases where demand is crystallised on conclusion of the proceedings. Further, such period is proposed to be extended to three years, for reasons to be recorded in writing in order ensure that the limitation of time period may not lead to permanent loss of revenue and hindrance in recovery of tax due.


Rationalisation of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015

In order to clarify the legislative intent behind enacting the BM Act, which was to tax such foreign income and assets, which were not charged to tax under the Income-tax Act, it is proposed to amend the said section so as to provide that the “assessee” shall mean:

• a person being a resident in India within the meaning of Section 6 of the Income-tax Act, in the previous year,

• or a person being a non-resident or not ordinarily resident in India within the meaning of clause (6) of Section 6 of the Income-tax Act, in the previous year, who was resident in India either in the previous year to which the income referred to in Section 4 relates, or in the previous year in which the undisclosed asset located

outside India was acquired.

It is also proposed to provide that the previous year of acquisition of the undisclosed asset located outside India shall be determined without giving effect to the provisions of Section 72(c) of the BM Act.

Further, a clarificatory amendment is also proposed to be made to Section 10 of the BM Act so as to include the expressions “re-assess” and “reassessment” in Sub-section (3) and (4) of the said section.

These amendments will take effect retrospectively from July 1, 2015.

Considering the significance of cases assessed under the BM Act, it is proposed to amend the said section so as to provide that the provisions of Section 144A of the Income-tax Act shall be applicable to the BM Act with necessary modifications. The amendment is also proposed to clarify that the Commissioner (Appeals) may also vary the penalty order so as to enhance or reduce the penalty.


Rationalisation of the Income Declaration Scheme, 2016

In order to address genuine concern of the declarants under the Income Declaration Scheme, 2016 (the Scheme), it is proposed to make amendment that where the amount of tax, surcharge and penalty, has not been paid within the due date, the Central Government may notify the class of persons who may make the payment of such amount on or before a notified date, along with the interest on such amount, @ 1% of every month or part of a month, comprised in the period, commencing on the date immediately following the due date and ending on the date of such payment.

Further, it is proposed that the Central Government may also notify the class of persons to whom the amount of tax, surcharge and penalty, paid in excess of the amount payable under the Scheme shall be refundable.

This amendment will take effect retrospectively from June 1, 2016.

Rationalisation of provisions relating to STT

With a view to rationalise the STT provisions, in case of exercise of options, STT to be levied on the difference between settlement price and strike price. This amendment will take effect from September 1, 2019.

Rationalizing the provisions of the Prohibition of Benami Property Transactions Act (PBPT)

With a view to ensure compliance with the summons issued and information required to be furnished under the PBPT Act, it is proposed to insert a new section 54A, so as to provide for levy of penalty of INR 25,000 for failure to comply with the summons issued or to furnish information under section 19 or section 21 respectively of the PBPT Act.


Extension of tax concession to The Special Undertaking of the Unit Trust of India (SUUTI)

It has been proposed to extend the benefit of the Special Undertaking of the Unit Trust of India (SUUTI) created vide the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 to liquidate Government liabilities and received in relation to the specified undertaking is exempt from income-tax or any other tax or any income, profits or gains derived, or any amount from March 31, 2019 for further period of two years till March 31, 2021.

This amendment will take effect retrospectively from April 1, 2019.

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CUSTOMSLEGISLATIVE CHANGES IN THE CUSTOMS ACT, 1962

• Scope of Customs Act, 1962 expanded to empower an officer of customs to arrest a person who has committed an offence outside India or Indian Customs waters.

• Provision relating to furnishing of export manifest has been amended to provide a facility that the departure manifest can also be furnished to a person notified by the CG, in addition to the person-in charge of the conveyance.

• Proper officer of Customs empowered to carry out verification of a person for ascertaining compliance with the provision of the Customs Act or any other law for the time being in force, for protecting the interests of revenue or to prevent smuggling through the Aadhaar number or through such other alternative and viable means of identification.

• Provision relating to screening or X-ray bodies has been amended to enable the proper officer to scan or screen, with the prior approval of AC or DC, any person suspected of secreted goods inside his body.

• Provisions in relation to seizure of goods, documents and things have been amended to specify the conditions under which the custody of seized goods could be given to certain person.

• Proper officer of Customs empowered to provisionally attach any bank account for safeguarding the government revenue and prevention of smuggling, for a period not exceeding 6 months. It is also being provided that a Principal Commissioner of Customs or Commissioner of Customs may further extend the period of attachment up to 6 months.

• Provision in relation to release of goods, documents and things seized pending adjudication has been amended to empower an adjudicating authority to release bank account provisionally attached to the accountholder on fulfilment of certain conditions.

• New provision for penalty inserted in case of any person who has obtained any instrument by fraud, collusion, willful misstatement or suppression of facts and such instrument has been utilized by such person or any other person for discharging duty.

INDIRECT TAX

4342

• Provision in relation to penalties for contravention expressly mentioned has been amended to increase the maximum limit of penalty from INR 0.1 Million to INR 0.4 Million.

• Provisions in relation to option to pay fine in lieu of confiscation has been amended to provide that in respect of deemed closure proceedings, no fine in lieu of confiscation shall be imposed on the infringing goods.

• Provisions in relation to evasion of duty or prohibition has been amended to make obtaining the instruments from any authority by fraud, collusion, wilful misstatement or suppression of facts, where such instrument has been utilized by any person, a punishable offence if the duty relatable to utilization of the instrument exceeds INR 5 Million.

• Board has been empowered for making regulations specifying time, form, manner, restrictions and conditions for amendment of any document.

• Maximum limit of penalty for violation of any provision of rules or regulations has been increased from INR 0.05 Million to INR 0.2 Million

CHANGES IN THE CUSTOMS TARIFF ACT, 1975

• General rate of BCD remains at 10 percent.

• Provisions amended to provide that appeal against an order of determination or review regarding the existence, degree and effect of increased

EXEMPTION FROM BCD

• All forms of Uranium Ores and Concentrates and all goods for use generation of nuclear power.

• Specified raw materials for use in the manufacture of Preform of Silica.

• Military equipment and their parts imported by the Ministry of Defence or the Armed Forces, subject to specified conditions.

• Specified capital goods for manufacture of specified electronic items such as PCB, Charger of Cellular Mobile Phone, Display Panel, etc. subject to actual user condition.

• Goods imported under Project Imports for setting up of specified atomic power projects.

• Raw material, parts or accessories for use manufacture of artificial kidneys, disposable sterilized dialyzer and micro-barrier of artificial kidney.

• Specified parts of electric vehicles eg. E-drive assemble, on board charger etc.

• Headphones, earphones and combined microphone/speaker sets of Line Telephone handsets.

AMENDMENTS IN THE FIRST SCHEDULE TO THE CUSTOMS TARIFF ACT, 1975

AMENDMENTS AFFECTING RATES OF BCDTariff item Commodity Rate of Duty

From ToConstruction Materials

1 3918 Floor covering of plastics, Wall or ceiling coverings of plas-tics

10% 15%

2 6905, 6907 Ceramic roofing tiles and ceramic flags and pavings, hearth or wall tiles

3 8302 Base metal fittings, mountings and similar articles suit-able for furniture, doors, staircases, windows, blinds, hinge for auto mobiles

10% 15%

Precious Metals

4 7106 Silver (including silver plated with gold or platinum) un-wrought or in semi- manufactured forms, or in powdered form

10% 12.5%

5 7107 00 00 Base metals clad with silver, not further worked than semi-manufactured

10% 12.5%

4544

6 7108 Gold (including gold plated with platinum) unwrought or in semi- manufactured forms, or in powder form

10% 12.5%

7 7109 00 00 Base metals or silver, clad with gold, not further worked than semi- manufactured

10% 12.5%

8 7110 Platinum, unwrought or in semi-manufactured form, or in powder form

10% 15%

9 7111 00 00 Base metals, silver or gold, clad with platinum, not further worked than semi- manufactured

10% 12.5%

Automobile parts11 6813 Friction material and articles thereof (for example, sheets,

rolls, strips, segments, discs, washers, pads), not mounted, for brakes, for clutches or the like, with a basis of asbestos, of other mineral substances or of cellulose, whether or not combined with textile or other materials.

10% 15%

12 7009 Glass mirrors, whether or not framed, including rear-view mirrors

10% 15%

13 8301 20 00 Locks of a kind used in motor vehicles 10% 15%14 8421 23 00 Oil or petrol filters for internal combustion engines 7.5% 10%15 8421 31 00 Intake air-filters for internal combustion engines 7.5% 10%16 8421 39 20. 8421

39 90Cellular mobile phones 15% 20%

17 8512 10 00, 8512 20 10, 8512 20 20

7.5% 10% 15%

18 8512 20 90, 8512 30 90

Smart watches / wearable devices 10% 20%

19 8512 30 10 Horns for vehicles 10% 15%20 8512 90 00 Parts of visual or sound signaling equipment for bicycles or

motor vehicles7.5% 10%

21 8512 40 00, 8539 10 00, 8539 21 20, 8539 29 40

Seats and parts of seats [other than aircraft seats and their parts]

10% 20%

22 8706 Chassis fitted with engines, for the motor vehicles of head-ings 8701 to 8705.

10% 15%

23 8707 Bodies (including cabs), for the motor vehicles of headings 8701 to 8705

10% 15%

Electronics and Electrical equipment

24 8415 90 00 Indoor and outdoor unit of split –system air conditioner 10% 20%25 8518 21 00, 8518

22 00Wrist watches, pocket watches and other watches, includ-ing stop watches

10% 20%

26 8521 90 90 Digital Video Recorder (DVR) and Network Video Recorder (NVR)

15% 20%

27 8525 80 CCTV camera and IP camera 15% 20%28 9001 10 00 Optical Fibres, optical fibre bundles and cables 10% 15%

Plastic and Rubber

29 3904 Poly Vinyl Chloride 7.5% 10%30 3926 90 91, 3926

90 99Festive, carnival or other entertainment articles 10% 20%

31 4002 31 00 All goods i.e. Butyl Rubber 5% 10%32 4002 39 00 Fishing rods, fishing-hooks and other line fishing tackle; fish

landing nets, butter fly nets and similar nets; decoy birds and similar hunting or shooting requisites

10% 20%

Precious Metals

33 7106 Silver dore bar, having silver content not exceeding 95% 8.5% 11%34 7108 Gold dore bar, having gold content not exceeding 95% 9.35% 11.85%35 71 or 98 (a) Gold (excluding ornaments studded with stones or

pearls) imported by an eligible passenger as baggage(b) Silver (excluding ornaments studded with stones or pearls) imported by an eligible passenger as baggage

10% 12.5%

Iron and Steel, Other base metals

36 7218 Stainless steel in ingots or other primary forms; semi-fin-ished products of stainless less

5% 7.5%

Food processing37 0801 32 10 Cashew kernel broken INR 60/ Kg

or 45%,whichever is higher

70%

38 0801 32 200801 32 90

Cashew kernel whole, Cashew nuts shelled, others INR 75/ Kg or 45%,whichever is higher

70%

AMENDMENTS AFFECTING RATES OF BCDS.No. Tariff item Commodity Rate of Duty

From To 1 2710 Naphtha 5% 4 %2 2910 20 00 Methyloxirane (Propylene Oxide) 7.5% 5%

3 5101 Wool Fibre 5% 2.5%4 5105 Wool Tops 5% 2.5%

5 72257225 19 90

Inputs for the manufacture of CRGO steel:-a) MgO coated cold rolled steel coilsb) Hot rolled coilsc) Cold-rolled MgO coated and annealed steeld) Hot rolled annealed and pickled coilsCold rolled full hard

5% 2.5%

6 7226 99 30 Amorphous alloy ribbon 10% 5%

• OTHERPROPOSALSINVOLVINGCHANGESINBCD

4746

7 8105 20 10 Cobalt mattes and other intermediate products of cobalt metallurgy

5% 2.5%

8 Chapter 152915 703823 11 003823 12 003823 13 00 3823 19 00

Palm stearin and other oils, having 20% or more fatty acid, Palm Fatty Acid Distillate and other industrial monocarbox-ylic fatty acids, acid oils from refining, for use in manufac-ture of soap and oleo chemicals.

Nil 7.5%

9 48 a. Newsprintb. Uncoated paper used for printing of newspapers

Nil 10%

10 5603 94 00 Water blocking tapes for manufacture of optical fiber cable Nil 20%11 4901 10 10

4901 91 004901 99 00

Printed books (including covers for printed books) and printed manuals, in bound form or in loose-leaf form with binder, executed on paper or any other material including transparencies.

Nil 5%

12 2709 20 00 Petroleum Crude Nil Re. 1 per tonne

13 8474 20 10 Stone crushing (cone type) plants for the construction of roads

Nil 7.5%

S.No. Tariff item Description Rate of DutyChange in effective rate of Road and Infrastructure Cess, levied as addition-al duty of customs, on Petrol and Diesel

From To

1 Motor spirit commonly known as petrol INR 8 per litre

INR 9 per litre

2 High speed diesel oil INR 8 per litre

INR 9 per litre

• LEVYOFTHEROADANDINFRASTRUCTURECESS

MISCELLANEOUS

Ʈ Printed books imported for personal use has been excluded from the heading 9804 and would attract applicable merit rate.

Ʈ Option to pay BCD at the rate of 7.5% at transaction value on goods imported without payment of customs duty for petroleum or coal bed methane operations, where disposal is made in unserviceable and mutilated condition.

Ʈ IGST and Compensation cess is being exempted on temporary importation of private road vehicles under the Customs Convention on Temporary Importation of Private Road Vehicles with retrospective effect from July 1, 2017 to December 31, 2018.

Ʈ Export duty on EI tanned leather has now been exempted.

Ʈ Export duty on Hides, skins and leathers, tanned and untanned, all sorts has been decreased from 60% to 40%.

EXCISE DUTY

• PROPOSALSINVOLVINGCHANGEINEXCISEDUTYRATESTHROUGHNOTIFICATIONS

S.No. Tariff item Commodity Rate of DutyFrom To

1 2402 20 20 Other than filter cigarettes, of length exceeding 65 millime-ters but not exceeding 70 millimeters

Nil INR 5 per thousand

2 2402 20 30 Filter cigarettes of length (including the length of the filter, the length of filter being 11 millimeters or its actual length, whichever is more) not exceeding 65 millimeters


3 2402 20 40 Filter cigarettes of length (including the length of the filter, the length of filter being 11 millimeters or its actual length, whichever is more) exceeding 65 millimeters but not ex-ceeding 70 millimeters


4 2402 20 50 Filter cigarettes of length (including the length of the filter, the length of filter being 11 millimeters or its actual length, whichever is more) exceeding 70 millimeters but not ex-ceeding 75 millimeters


5 2402 20 90 Other (Cigarettes containing tobacco) Nil INR 10 per thousand

6 2402 90 10 Cigarettes of tobacco substitutes Nil INR 5 per thousand

7 2403 99 10 Chewing tobacco Nil 0.5%8 2709 20 00 Crude Petroleum oil produced in specified oil fields under

production sharing contracts or in the exploration blocks offered under the New Exploration Licensing Policy (NELP) through international competitive bidding

INR 1per tonne

Nil

S.No. Commodity From To1 Motor spirit commonly known as petrol INR 7 per litre INR 8 per litre2 High speed diesel oil INR 1 per litre INR 2 per litre

S.No. Commodity From To1 Motor spirit commonly known as petrol INR 8 per litre INR 9 per litre2 High speed diesel oil INR 8 per litre INR 9 per litre

• LEVYOFSPECIALADDITIONALEXCISEDUTY

• LEVYOFROADANDINFRASTRUCTURECESSONPETROLANDDIESEL

Note: “Basic Excise Duty” means the excise duty set forth in the First Schedule to the Central Excise Tariff Act, 1985.

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SERVICE TAX

• RETROSPECTIVEEXEMPTION

Ʈ Exemption to services provided or agreed to be provided by the SG by way of grant of liquor license, against consideration in the form of license fee or application fee or by whatever name it is called, during April 1, 2016 to June 10, 2017.

Ʈ Exemption to services provided or agreed to be provided by the Indian Institutes of Management, as per the guidelines of the CG, to their students, for Specified Educational Programme except Executive Development Programme, during July 1, 2003 to March 31, 2016

Ʈ Exemption on upfront amount payable in respect of service by way of granting long term lease of thirty years or more of plots for development of infrastructure for financial business. Exemption would be for the period commencing from October 1, 2013 to June 30, 2017.

• DISPUTERESOLUTIONCUMAMNESTYSCHEME

Ʈ A dispute resolution cum amnesty scheme called the Sabka Vishwas Legacy Dispute Resolution Scheme is being introduced for resolution and settlement of legacy cases of Central Excise and Service Tax.

GOODS AND SERVICE TAX

• LEGISLATIVECHANGESINTHEGOODSANDSERVICESTAX

Ʈ Definition of “Adjudicating authority” to exclude “the National Appellate Authority for Advance Ruling”.

Ʈ Provision introduced for constitution of National Appellate Authority for Advance Ruling for hearing appeals against conflicting advance rulings pronounced on the same question by the Appellate Authorities of two or more States or UT in case of distinct persons and order for the same would be passed within a period of 90 days from the date of filing of the appeal.

PARTICULARS DATE FROM WHICH CHANGES WILL BE EFFECTIVE

Legislative changes Date of enactment of the Finance Bill, 2019

New rates of Customs Duty Midnight of July 5, 2019New rates of Excise Duty Midnight of July 5, 2019

Ʈ Provision introduced for alternative composition scheme for supplier of services or mixed suppliers (not eligible for the earlier composition scheme) having an annual turnover in preceding financial year upto INR 5 Million.

Ʈ Further, value of exempt supplies services provided by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount shall not be taken into account:

• for computing the aggregate turnover to determine eligibility for the composition scheme

• for determining the value of turnover in a State or Union territory to calculate tax payable

Ʈ Provision related to persons liable to registration has been amended to provide for higher threshold exemption limit from INR 2 Million to such amount not exceeding INR 4 Million in case of supplier who is engaged in exclusive supply of goods.

Ʈ Provision introduced for making Aadhaar authentication mandatory for specified class of new taxpayers and to prescribe the manner in which certain class of registered taxpayers are required to undergo Aadhaar authentication.

Ʈ Provision inserted wherein specified suppliers shall have to mandatorily give the option of specified modes of electronic payment to their recipients.

Ʈ Provision related to furnishing of returns has been amended to allow the composition taxpayers to furnish annual return along with quarterly payment of taxes; and other specified taxpayers may be given the option for quarterly or monthly furnishing of returns and payment of taxes under the proposed new return system.

Ʈ Provision related to annual return has been inserted to empower the Commissioner to extend the due date for furnishing Annual return and reconciliation statement.

Ʈ Provision related to payment of tax interest, penalty, fee or any other amount has been inserted to provide a facility to the registered person to transfer an amount from one head to another head in the electronic cash ledger.

Ʈ Provision related to interest on delayed payment of tax has been inserted to provide for charging interest only on the net cash tax liability, except in those cases where returns are filed subsequent to initiation of any proceedings.

Ʈ Provision related to collection of tax at source has been inserted to empower the Commissioner to extend the due date for furnishing of monthly and annual statement by the person collecting tax at source.

Ʈ Provision introduced for transfer of amount between Centre and States, consequential to amendment in relation to payment of tax, interest, penalty and other amounts, allowing transfer of an amount from one head to another head in the electronic cash ledger of the registered person.

Ʈ Provision related to refund of tax has been inserted to provide that the CG may disburse refund amount to the taxpayers in respect of refund of State taxes as well.

RETROSPECTIVE EXEMPTION

Ʈ Retrospective exemption in case of uranium ore concentrate from the levy of GST from July 1, 2017 to November 14, 2017.

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Direct monitoring and supervising of NBFC affairs by RBI

• Relevant changes in RBI Act have been proposed so as to enable RBI to directly monitor and supervise the day to day affairs. Changes include giving powers to the RBI to remove directors from office, supersession of board of directors by appointment of suitable persons as administrators, powers to take action against auditors, powers relating to restructuring/splitting/amalgamation of NBFCs etc.

Widening the category of NBFCs to participate on TReDS

• To bring more participants, especially NBFCs, not registered as NBFCs-Factor, on the Trade Receivables Discounting System (TReDS) platform, amendment in the Factoring Regulation Act, 2011 is proposed which shall allow all NBFCs to directly participate on the TReDS platform.

Streamlining of Multiple Labour Laws into Four Labour Code

• The government is proposing to streamline multiple labour laws into a set of four labour codes which will ensure that the process of registration and filing of returns gets standardized.

FOREIGN DIRECT INVESTMENT & REGULATORY PROPOSALS

ChangestoFDIPolicy• Government to further examine opening up FDI in civil aviation, media (animation, AVGC) and Insurance sectors in consultation with all stakeholders

• 100% FDI for insurance intermediaries

• Local Sourcing norms to be eased for FDI in Single Brand Retail Trade (SBRT)

Increasing Foreign Portfolio Investment limits while subsuming NRI Investment category

• In order to increase NRI participation in the Indian capital markets and provide them with seamless access to Indian equities, FM proposes to merge the NRI-Portfolio Investment scheme route (Schedule 3) with the Foreign Portfolio Investment (‘FPI’) route (Schedule 2). More importantly, budget provides for increase in statutory limit of the FPI investment in a company from existing 24% up to the sector specific foreign investment limit while an option may be given to the concerned corporate to restrict the limits to a lower threshold. FPIs are additionally proposed to be permitted to subscribe to listed debt securities issued by ReITs and InvITs.

Minimum public shareholding in listed companies to be increased from 25% to 35%

• SEBI has been asked to examine the possibility of raising the threshold shareholding percentage.

Creation of Social stock exchange under SEBI

• With a view to allow social enterprises and voluntary organizations to list themselves for the purposes of raising capital as equity, debt or units like a mutual fund, the budget proposes to initiate steps towards creating an electronic fund raising platform in this regard.

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programme to all districts. One woman in every SHG will also be made eligible for a loan up to INR 0.1 million under the MUDRA Scheme.

• A proposal is coined for issuing Aadhaar card for non-resident Indians with Indian passports, without waiting for 180 days.

Healthcare

• Measures have been proposed to expand the Swachh Bharat Mission to undertake sustainable solid waste management in every village.

• It is targeted to make India Open Defecation Free by October 2, 2019.

Education

• It is proposed to launch a New National Education Policy to transform India’s higher education system which shall include major changes in both school and higher education by bringing greater focus on research and innovation.

• It is proposed to establish a National Research Foundation to fund, coordinate and promote research in the country.

• In order to make India a hub of higher education, it is proposed to allocate an amount of INR 4 Billion to the head “World Class Institutions”.

• To reform the regulatory system of higher education in India, a draft legislation for setting up Higher Education Commission of India is proposed to be presented.

• To popularize sports at all levels, a National Sports Education Board for Development of Sportspersons would be set up under Khelo India Scheme.

SECTOR WISE IMPACT MSMEANDSTART-UPSMSME and Small Businesses

• To give impetus to the MSME sector and to allow ease of credit to MSME, the government has introduced providing of loans upto INR 10 million within 59 minutes through an online portal.

• Under the Interest Subvention Scheme for MSMEs, INR 3.50 billion has been allocated for FY 2019-20 for 2% interest subvention for all GST registered MSMEs, on fresh or incremental loans.

• A dedicated bills and payment platform will be introduced for eliminating the delays in the payments by government to SMEs and MSMEs.

• It is proposed to launch ‘Scheme of Fund for Upgradation and Regeneration of Traditional Industries’ to facilitate cluster based development to make the traditional industries more productive, profitable and capable for generating sustained employment opportunities.

Start-ups

• It is proposed to start a television programme exclusively for start-ups. This shall serve as a platform for promoting start-ups, discussing issues affecting their growth, matchmaking with venture capitalists and for funding and tax planning.

• Start-ups and their investors who file requisite declarations and provide information in their returns will not be subjected to any kind of tax scrutiny in respect of valuations of share premiums.

• The stand-up India scheme for assistance in setting up businesses has been further continued till year 2025.

INVESTMENT,EXPENDITUREANDPOLICYINITIATIVESAgriculture and Rural Economy

• IIt is proposed to upgrade 1,25,000 kms of road over the next five years, with an estimated cost of INR 802.50 billion.

• Every single rural family, will have an electricity and a clean cooking facility by year 2022.

• In the second phase of Pradhan Mantri Awas Yojana – Gramin, during FY 2019-20 to 2021-22, 19.5 million houses are proposed to be provided to the eligible beneficiaries.

• The scheme of Pradhan Mantri Matsya Sampada Yojana is launched to establish a robust fisheries management framework.

• The Scheme for Promotion of Innovation, Rural Industry and Entrepreneurship’ to develop 75,000 skilled entrepreneurs in agro-rural industry sectors.

• It is proposed to form 10,000 new Farmer Producer Organizations to ensure economies of scale for farmers over the next 5 years.

• A new Ministry is formed to look at the management of water resources and water supply in an integrated and holistic manner, and will work with States to ensure (piped water supply) to all rural households by year 2024 under the ‘Jal Jeevan Mission’.

SOCIALSECTOREase of Living

• The Pradhan Mantri Karam Yogi Maandhan Scheme is introduced to extend the pension benefit to about 3 million retail traders & small shopkeepers whose annual turnover is less than INR 15 million. For this total outlay of INR 7.50 billion has been made in the budget allocation.

• The Government is proposing to streamline multiple labour laws into a set of 4 labour codes. This will ensure that process of registration and filing of returns will get standardized and streamlined. With various labour related definitions getting standardized, it is expected that there shall be less disputes.

• It is proposed to introduce a Model Tenancy Law to promote rental housing.

• With a focus on maintaining a cleaner environment while ensuring sustainable energy usage it is targeted to make India free of incandescent bulbs and CFL. Promotion on the use of solar stoves and battery chargers in the country will be taken up.

• It is proposed to further expand the Woman Self Help Group interest subvention

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enterprises and voluntary organizations working for the realization of a social welfare objective so that they can raise capital as equity, debt or as units like a mutual fund.

• For the purpose of seamless transfer of treasury bills and government securities between RBI and SEBI Depository ledgers, the Government will take up necessary measures in this regard in consultation with RBI and SEBI.

• To make India more attractive FDI destination, the following steps are proposed:

Ʈ Examining further opening of FDI in aviation, media and insurance sector.

Ʈ 100% FDI will be permitted for insurance intermediaries.

Ʈ Local sourcing norms will be eased for FDI in Single Brand Retail sector.

• It is proposed to increase the statutory limit for FPI investment in a company from 24% to sectoral foreign investment limit. Further, FPIs will be permitted to subscribe to listed debt securities issued by ReITs and InvITs.

• It is proposed to merge the NRI-Portfolio Investment Scheme Route with the Foreign Portfolio Investment Route.

• It is proposed to extend the investment option in ETFs on the lines of Equity Linked Savings Scheme.

Banks and Financial Institutions

• To increase the operational effectiveness and efficiency of the public sector banks, these banks re-capitalised with INR 700 billion to boost credit.

• It has been proposed to strengthening the regulatory authority of RBI over NBFCs.

• For purchase of high-rated pooled assets of financially sound NBFCs, amounting to a total of INR 1,000 billion rupees during the current financial year, Government will provide 1 time 6 months’ partial credit guarantee to Public Sector Banks for first loss of upto 10%.

INFRASTRUCTUREDEVELOPMENT• It is proposed to use land parcels held by Central Ministries and Central Public Sector Enterprises to build large public infrastructure, through innovative instruments such as joint development and concession, public infrastructure and affordable housing.

Road & Transport

• The outlay for Pradhan Mantri Gram Sadak Yojna has been increased by 22% to INR 190 billion in FY 2019-20.

• The Government will carry out a comprehensive restructuring of National Highway Programme to ensure that the National Highway Grid of desirable length and capacity is created using financeable model.

• After completing the Phase 1 of Bharatmala, in the second Phase, States will be helped to develop State road networks.

Aviation

• For the development of a self-reliant aviation industry it has been proposed frame a roadmap for making India a hub for activities like aircraft financing, leasing activities from Indian shores and development of MRO industry.

Inland Waterways

• Development of inland waterways to shift a significant portion of inland cargo movement from road and railways.

• The movement of cargo volume on Ganga is estimated to increase by nearly 4 times in the next 4 years.

Railways

• It is estimated that Railway Infrastructure would need an investment of INR 50,000 billion between 2018-2030.

• It is proposed to use PPP in railway sector to unleash faster development and completion of projects.

• It is proposed to launch a massive programme for

of capping of International Securities Identification Number.

• Indian Development Assistance Scheme which provides concessional financing for projects and contributes to infrastructure development and capacity building to be revamped.

• It is proposed to set up an expert committee to study current situation relating to long-term finance and recommend the structure and required flow of funds through development finance institutions.

FINANCIALSECTORCapital Market

• It is proposed to raise the current threshold of 25% to 35% of public shareholding in the listed companies.

• It is proposed to rationalize and streamline the existing KYC norms for FPIs to make it more investor friendly without compromising the integrity of cross-border capital flows.

• A social stock exchange is proposed to be set-up under the regulatory ambit of SEBI for listing social

railway modernisation project this year.

Power & Energy

• To launch the model ‘One Nation, One Grid. It has been proposed make a blueprint this year for developing gas grids, water grids, i-ways, and regional airport and to ensure power availability to states at affordable rates.

• It is announced to implement the recommendations of High Level Empowered Committee on retirement of old & inefficient plants, to address the paucity of Natural Gas.

• To remove barriers like cross subsidy surcharges, undesirable duties on open access sales or captive generation for industrial and other bulk power consumers, a package of power sector tariff and structural reforms would soon be announced by the government.

Infrastructure Financing

• It is estimated that India requires investments averaging INR 20,000 billion every year (USD 300 billion a year). The number of measures proposed to enhance sourcing of capital:

• A Credit Guarantee Enhancement Corporation will be set up for which regulations have been notified by the RBI.

• An action plan will be put in place to deepen the market for long term bonds including for deepening markets for corporate bond repos, credit default swaps etc., with specific focus on infrastructure sector.

• To permit investments made by FIIs/FPIs in debt securities issued by Infrastructure Debt Fund – Non-Bank Finance Companies to be transferred/sold to any domestic investor within the specified lock-in period.

• To deepen the Corporate tri-party repo market in Corporate Debt securities, Government will work with regulators RBI/SEBI to enable stock exchanges to allow AA rated bonds as collaterals.

• User-friendliness of trading platforms for corporate bonds will be reviewed, including issues arising out

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• It is proposed that NBFCs are now have to maintain a Debenture Redemption Reserve in addition to the special reserve while making public placement of debt.

• To bring more participants, especially NBFCs not registered as NBFCs-factor, steps will be taken to allow all NBFCs to directly participate on the TReDS platform.

• Government has proposed to shift the regulatory authority of housing finance sector from National Housing Bank to RBI.

• Steps will be taken to separate the NPS Trust from PFDRA with appropriate organizational structure.

• To encourage on-shoring of international insurance transactions and to enable opening of branches by foreign reinsurers in the international financial services centre, it is proposed to reduce the net owned fund requirements from INR 50 to 100 billion.

• With respect to disinvestment, Government is considering to go below 51% on case to case basis (in case where the control need to be retained by Government). Also to modify present policy of retaining 51% Government stake to retaining 51% stake inclusive of the stake of Government controlled institutions.

Disinvestment

• It is proposed of setting an enhanced target of INR 1,050 billion from divestment receipts for the FY 2019-20 by undertaking strategic sale of PSUs.

• It is proposed to offer more CPSEs for strategic participation by the private sector.

• Government to take necessary steps to meet public shareholding norms of 25% for all listed PSUs and raise the foreign shareholding limits to maximum permissible sector limits for all PSU which are part of Emerging Market Index.

TECHNOLOGY• It is proposed that the business establishments with annual turnover more than INR 500 million to offer low cost digital modes of payment such as such as BHIM UPI, UPI-QR Code, Aadhaar Pay, certain Debit cards, NEFT, RTGS to their customers and no charges or Merchant Discount Rate to be imposed on it to customers as well as merchants.

• A Public Sector Enterprise viz. NSIL has been incorporated as a new commercial arm of Department of Space to tap the benefits of the Research & Development carried out by ISRO.

TOURISM• It is proposed to develop 17 iconic tourism sites into world class tourist destinations, enhancing the visitor experience leading to increased visits of domestic and international tourists.

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GLOSSARY 5G Fifth GenerationAAR Authority for Advance RulingAC/DC Assistant Commissioner/

Deputy CommissionerAHF Affordable Housing FundAHIDF Animal Husbandry

Infrastructure Development Fund

AIF Alternative Investment Fund AOP Association of PersonsAPA Advance Pricing AgreementAPMCs Agricultural Produce Market

CommitteeARE Alternate Reporting EntityAUM Assets Under ManagementAVGC Animation, Visual Effects,

Gaming & ComicsBCD Basic Customs Duty BE Budgeted EstimatesBM Act Black Money (Undisclosed

Foreign Income and Assets) and Imposition of Tax Act, 2015

BOI Body of IndividualsBOP Balance of PaymentsBSE Bombay Stock ExchangeCapex Capital ExpenditureCbCR Country-by-Country reportCCTV Closed-Circuit TelevisionCD-ROM Compact Disc, Read Only

MemoryCEA Central Excise Act 1944CFPI Consumer Food Price Index CG Central GovernmentCGST Central Goods and Services

Tax Act, 2017CKD Completely Knocked DownCPI Consumer Price IndexCPI-C Consumer Price Index –

CombinedCPSE Central Public Sector

EnterpriseCTT Commodity Transaction TaxCustoms Act Customs Act, 1962CVD Countervailing DutyDDT Dividend Distribution TaxDTAA Double Taxation Avoidance

AgreementEEZ Exclusive Economic Zonee-Nam Electronic National Agriculture

MarketEPF Employees’ Provident FundEPFO Employees’ Provident Fund

OrganisationFAIDF Fisheries and Aquaculture

Infrastructure Development Fund

FDI Foreign Direct InvestmentFII Foreign Institutional Investor

FPOs Farmer Producer Organizations

FTS Fee for Technical ServicesGDP Gross Domestic Product GOBAR-DHAN Galvanizing Organic Bio-Agro

Resources DhanGrAMs Gramin Agricultural MarketsGST Goods & Service TaxGSTN Goods and Services Tax

NetworkGVA Gross Value Added HUF Hindu Undivided FamilyIBC Insolvency & Bankruptcy

Code, 2016ICDS Income Computation &

Disclosure StandardsID Identity documentIFSC International Financial

Services CentreIGST Integrated Goods and

Services Tax Act,IIFCL India Infrastructure Finance

Corporation LimitedIIM Indian Institute of

ManagementIISc Indian Institute of ScienceIIT Indian Institute of TechnologyIND-AS Indian Accounting StandardsINR Indian National RupeeINR Indian RupeesInvITs Infrastructure Investment

FundsKms KilometersLTCG Long Term Capital GainsLTIF Long Term Irrigation FundMAT Minimum Alternate TaxMGNREGA Mahatma Gandhi National

Rural Employment Guarantee Act

MLI Multilateral InstrumentMSMEs Medium, Small and Micro

EnterprisesMSP Minimum Support PriceMUDRA Micro Units Development and

Refinance Agency BankNABARD National Bank for Agriculture

and Rural DevelopmentNBFC Non-Banking Finance

CompaniesNCLT National Company Law

TribunalNCT National Capital TerritoryNELP National Exploration &

Licensing PolicyNHAI National Highways Authority

of IndiaNIT National Institutes of

TechnologyNITI Aayog National Institution for

Transforming India AayogNPA Non-Performing AssetsNPS National Pension SchemeNSE National Stock ExchangeNTRO National Technical Research

OrganisationPAN Permanent Account NumberPBPT Prohibition of Benami

Property Transactions Act PE Permanent EstablishmentPMFBY Pradhan Mantri Fasal Bima

YojnaPMRF Prime Minister’s Research

FellowsRDB Rupee Denominated BondsRE Revised EstimatesRISE Revitalising Infrastructure and

Systems in EducationSAD Special Additional Duties of

CustomsSCs Scheduled CastesSEBI Securities and Exchange

Board of IndiaSFT Statement of Financial

TransactionsSG State GovernmentSGST State Goods and Services Tax

Act, 2017SHGs Self Help GroupsSPAs Schools of Planning and

ArchitectureSTCG Short Term Capital GainsSTs Scheduled TribeSTT Securities Transaction TaxSUUTI The Special Undertaking of

the Unit Trust of IndiaTAN Tax Deduction Account

Number TDS Tax Deducted at SourceThe Act Income Tax Act, 1961TOT Toll, Operate and TransferTReDS Trade Electronic Receivable

Discounting SystemUAE United Arab EmiratesUK United KingdomUSA United States of AmericaUSD US DollarsUTGST Union Territory Goods and

Services Tax Act, 2017VPOs Village Producers

OrganizationsWPI Wholesale Price Index

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INDIA BUDGET STATEMENT - Nangia Andersen · growth, incentivize affordable housing, promote digital...

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