Table of Contents

•Economy Overview

•Fiscal Overview

•Balance of Payments

•International Trade

•Inflation

India Economic Highlights

•Administrative & Economic Initiatives

Key Initiatives

•Agriculture

•Real Estate & Housing

•Infrastructure

•Mining & Metals

•Energy

•Banking, Financial Services & Insurance

•Telecommunications & IT

•Services

•Other Sectors

Sectoral Impact

•Direct Tax

•Indirect Tax

Taxation Proposals

3

2

22

12

10

3

India Economic Highlights

Economic Indicators

Performance FY 2013-14

Targets FY 2014-15

% %

GDP Growth 4.70 5.40- 5.90

Fiscal Deficit to GDP 4.50 4.10

Inflation CPI terms 9.49 8.00

0

2

4

6

8

10

12

14

2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

BE

Growth rate Inflation (CPI) Fiscal Deficit

Interplay - Economic Indicators

Economy Overview

As the new government takes its first step to steer the economy which has seen steepdecline in broad indicators, found its way through roller coaster rupee fluctuations and havecome to terms with current account deficit, a few observations merit value for Union BudgetFY 2014-15.

In FY 2014-15, the Indian economy is all set to grow at 5+ per cent, which it could not make itto, in the last two years. The reduced speed of growth was felt everywhere, but more so inindustrial sector. Inflation did pace down, but not much. However, CAD did give some relief.The bull wave of financial markets started, taking a cue from 2nd consecutive decline infiscal deficit to GDP ratio. A further fall of inflation can help ease the stance of monetarypolicy and boost investor confidence. Performance based moderate recovery ofdeveloped global economies, can help look forward to better growth days in the comingyear and beyond.

Lower monsoon, unstable rupee and geo-political situation in oil-rich areas may posesignificant challenges for the planned growth. The following economic highlights sets onemore milestone in the India growth story.

4

Fiscal policies to be designed to aid growth and to reach the targeted fiscal deficit.

The fiscal consolidation target in FY 2013-14 was achieved by cut in expenditure whichmay impact the overall growth status.

There is a need to re-look at various tax incentives and exemption to improve taxbuoyancy.

Subsidies lead to wastage of scares resources and hence identification of needybeneficiary and phasing out of subsidies is a need of the hour.

Disinvestment program meets limited success due to conditions in financial markets.

Fiscal Overview

Fiscal Consolidation roadmap Fiscal Deficit of 3% in FY 2016-17Focus on rationalizing expenditure but without diluting the quality of expenditure

0

2

4

6

8

10

12

14

2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

Direct Tax Indirect Tax Total Tax

Tax to GDP Ratio

Revenue Augmentation MeasuresReasons for fall in collection

1. Simplification of tax laws2. Rationalization of tax holidays3. Widening of tax base4. Recovery of arrears5. Speedy disposal of cases

1. Economic slowdown2. Reduction in duty rates3. Fall in dutiable imports

%

5

Balance of Payments

Overview

The stress on India’s BoP was felt during FY 2011-12 as a fallout of the Euro Zone crisis andinelastic domestic demand for certain key imports also continued through FY 2012-13 andthe first quarter of FY 2013-14.

The position of capital inflows during the past three years is as follows:

65.30

92.00

47.90

-

20.00

40.00

60.00

80.00

100.00

US$ Billion2011-12 2012-13 2013-14

This moderation in levelsessentially reflects a sharpslowdown in portfolioinvestment and net outflow in‘short-term credit’ and ‘othercapital’.

Favorable Actions

Non-favorable Factors

Tim

ely

co

rre

ctive

ac

tio

ns

by

RB

I

Resulting into

6

Balance of Payments

306.6

502.2

195.6

318.6

466.2

147.6

0

100

200

300

400

500

600

Exports Imports Trade deficit

2012-13 2013-14

Reduction in Trade Deficit (US$ Billion)

10.5% of GDP

7.9% of GDP

47%

40%

25%

-12%

Factors resulting into Reduction in Trade Deficit

Reduction in Import of Gold

& Silver

Reduction in non POL and

non gold imports

Change in exports

Higher imports under POL

and Non-DGCI&S imports

88.2

32.4

0

20

40

60

80

100

US$ Billion

2012-13 2013-14

Current Account Deficit

4.7% of GDP 1.7% of GDP

292

304.2

US$ Billion

2013-14 2012-13

Leading to

Favorable Forex Reserves

7

International Trade

Export Composition & Sectoral Performance

Noticeable compositional changes have taken place in India’s export basket between FY2000-01 and FY 2013-14 with the share of petroleum, crude, and products increasing bynearly five times to 20.1 per cent, catapulted by its 33.5 per cent growth (CAGR)

Percentage Share CAGR 200-01 to 2013-14

Growth Rate 2013-14

2000- 01 2013-14

I. Primary Products 16.0 15.6 16.9 4.7

II. Manufactured Goods 78.8 63.7 15.1 4.6

III. Petroleum, crude & products 4.2 20.1 33.5 3.0

Total Exports 100.0 100.0 17.2 4.1

Industries including petroleum products, engineering goods, chemicals, agriculture, textileminerals have contributed to the increase with growth rate of 4.1 per cent while certainindustries like gems & jewelry and electronic goods are still facing negative growth.

Import growth

32.30%

0.30%

-8.30%-20.00%

-10.00%

0.00%

10.00%

20.00%

30.00%

40.00%

Import Growth

2011-12 2012-13 2013-14

Deceleration of Import growthowing to fall in non-oil imports by12.8 per cent.

Gold Imports:Gold imports declined from 1078tonnes in FY 2011-12 to 664tonnes in FY 2013-14, on theback of several measures takenby the government. In valueterms, gold and silver imports fellby 40.1 per cent to US$ 33.4billion in FY 2013-14.

India’s Services Trade

6th

Larg

est

Exp

ort

er

3.4% share of world exports

7th

Larg

est

Im

po

rte

r

3% share of world imports

YOY growth of 4 per cent in FY 2013-14 ascompared to 2.4 per cent in FY 2012-13

Moderate export growth

Fall in imports

Trade Deficit

Fall in Trade Deficit by 27.8%

8

Inflation

Along with slow growth, inflation continued to be an impediment. Although average WPIinflation declined in FY 2013-14 to 6.0 per cent from 8.9 per cent in FY 2011-12 and 7.4 percent in FY 2012-13, it is still high. Moreover, WPI inflation in food averaged 12.2 per centannually in the five years ending FY 2013-14, was steeper than non-food inflation.Fortunately, the rising inflation that slowed the growth, savings, investment andconsumption, has subsided.

CPI declined from 10.21 per cent during FY 2012-13 to about 9.49 per cent in FY 2013-14.

Fuel inflation was in double digits in the last three quarters. A major reason for highinflation in fuel and power items was the rationalization of tariff for electricity in manystates, in addition to the policy of allowing greater pass-through in diesel prices andrupee depreciation.

IMF forecasts commodity prices to remain stable. This will keep WPI in check. However,sub-normal monsoon on account of El Nino effect and high oil prices due to geo politicalsituation in Middle East poses risk. Government’s decision on fertilizer subsidy andincrease in Minimum Support Price would also impact food inflation.

The government needs to move towards a low and stable inflation regime through fiscalconsolidation, establishing a monetary policy framework, and creating a competitivenational market for food. Further lower inflationary expectations should increasedomestic household financial savings and make resources available for investment.

0

1

2

3

4

5

6

2004 2007 2010 2013

Volatility y-o-y CPI Inflation (%)

Volatility y-o-y CPI

Inflation (%)

9

Key Initiatives

10

Key Initiatives

Administrative &

Economic Initiatives

Regulatory Initiatives:

Sovereign right of the Government to undertake retrospective legislation to be exercisedwith extreme caution and judiciousness.

Legislative and administrative changes to sort out pending tax demands of more than Rs. 4lakh crore under dispute and litigation.

Measures for widening the applicability of AAR.

Introduction of GST to be given thrust.

Convergence with International Financial Reporting Standard by adoption of the newIndian Accounting Standards (Ind AS) by Indian Companies.

Foreign Direct Investment:

The composite cap of foreign investment to be raised to 49 per cent with full Indianmanagement and control through the FIPB route.

The composite cap in the insurance sector & defense sector to be increased up to 49 percent from 26 per cent with full Indian management and control through the FIPB route.

Requirement of the built up area and capital conditions for FDI to be reduced from 50,000square meters to 20,000 square meters and from USD 10 million to USD 5 million respectivelyfor development of smart cities.

Budget Estimates:

Budget Plan increase targeted towards Agriculture, capacity creation in Healthcare andEducation, Rural Roads and National Highway Infrastructure, Railway network expansion,Clean Energy initiatives, development of Water Resources and River Conservation plans.

Proposed to establish an Export Promotion Mission to bring all stakeholders under oneumbrella.

MSME Sector:

Definition of MSME to be reviewed to provide for a higher capital ceiling.

Fund of Funds with a corpus of Rs.10,000 crore for providing equity through venture capitalfunds, quasi equity, soft loans and other risk capital specially to encourage new startups byyouth to be set up.

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Sectoral Impact

12

Sectoral impact

Agriculture

Agricultural sector has performed remarkably well in FY 2013-14. The agriculture GDPgrowth for FY 2013-14 is estimated at 4.6 per cent as compared to 4.0 per cent in last fouryears.

Average level of mechanization in agriculture is only 25 per cent as compared to morethan 90 per cent in developed countries.

Agriculture export likely to cross US$ 45 billion in FY 2013-14; higher from US$ 41 billion in FY2012-13.

Sub-optimal management of food stocks led to wastages, fuelled inflationary pressuresand added to food subsidy outgo leading to wastage of economic resources.

While the continued growth of Indian agriculture is significant in the context of foodsecurity and climate change, some major concerns remain including soil degradation,market distortions that prevent creation of national common market and creation ofrobust distribution network and warehousing.

On a positive note, there appears to be no cause of alarm on the El Niño front as India iswell placed on food grains availability, with record domestic production and huge stocksin the central pool.

Budget Highlights:

Rs. 1,000 crore provided for ‘Pradhan Mantri Krishi Sinchayee Yojna’ for assured irrigation.

More productive and asset creating linkages to agriculture and allied activities would beprovided under MGNREGA.

Rs. 100 crore set aside for ‘Agri-tech Infrastructure Fund’.

Technology driven second green revolution with focus on higher productivity and including‘Protein Revolution’ will be area of major focus.

Transformation plan to invigorate the warehousing sector and significantly improve post-harvest lending to farmers.

Corpus of Rural Infrastructure Development Fund raised by an additional Rs. 5,000 crorefrom the target given in the Interim Budget to Rs. 25,000 crore.

Allocation of Rs. 5,000 crore provided for the Warehouse Infrastructure Fund.

Rs. 100 crore provided for development of organic farming in North Eastern States.

Basic Excise Duty on machinery for preparation of fruits, nuts or vegetables, poultry, meatetc. reduced from 10 per cent to 6 per cent.

13

Real Estate & Housing

Smart Cities: A sum of Rs. 7,060 crore is provided in the current fiscal for the project ofdeveloping one hundred ‘Smart Cities’

Incentives for REITS: Complete pass through for the purpose of taxation.

A modified REITS type structure for infrastructure projects – ‘Invits’.

Allocation for NHB increased to Rs. 8,000 crore to support rural housing.

Extended additional tax incentive on home loans shall be provided to encourage people,especially the young, to own houses.

Mission on Low Cost Affordable Housing anchored in the NHB to be set up.

A sum of Rs. 4,000 crore for NHB from the priority sector lending shortfall with a view toincrease the flow of cheaper credit for affordable housing to the urban poor/EWS/LIGsegment is provided.

Slum development to be included in the list of CSR activities to encourage the privatesector to contribute more.

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Infrastructure

The 12th Five year plan has laid special emphasis on infrastructure development asquality infrastructure is important not only for sustaining high growth but ensuringinclusive growth.

Today’s outlook portrays stalled infrastructure projects due to economic slow down,lower demand , sharp rise in input costs and failure of terms of PPP agreements.

The challenge remains in identification of core set of projects, channelizing investments,expatiating implementation, maintenance of facilities, co-ordination amongst thecentral ministry and balancing of environmental concerns.

India has further tried to strengthen its railways, road transport, ports and civil aviationthat is an important factor to any infrastructure requirement of a country.

Budget Highlights:

Vision of the Government is that 500 urban habitations to be provided support forrenewal of infrastructure and services in next 10 years through PPPs.

Present corpus of Pooled Municipal Debt Obligation Facility to be enlarged to Rs. 50,000crore from Rs. 5,000 crore.

Rs. 100 crore provided for setting up a National Industrial Corridor Authority.

An institution to provide support to mainstreaming PPPPs called 4PIndia to be set up witha corpus of Rs. 500 crores.

New Airports: Scheme for development of new airports in Tier I and Tier II cities to belaunched.

An investment of an amount of Rs. 37,880 crores in NHAI and State Roads is proposedwhich includes Rs. 3,000 crores for the North East.

Target of NH construction of 8500 km will be achieved in current financial year.

Work on select expressways in parallel to the development of the Industrial Corridors willbe initiated. For project preparation NHAI shall set aside a sum of Rs. 500 crore.

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Mining and Metals

Changes, if necessary, in the MMDR Act, 1957 to be introduced to encourage investmentin mining sector and promote sustainable mining practices.

To give an impetus to the stainless steel industry, increase in basic customs duty onimported flat-rolled products of stainless steel from 5 per cent to 7.5 per cent.

Duty on ship breaking scrap and melting scrap of iron or steel rationalized by reducingthe basic customs duty on ships imported for breaking up from 5 per cent to 2.5 per cent.

To prevent misuse and avoid assessment disputes, basic customs duty on semi processed,half cut or broken diamonds, cut and polished diamonds and colored gemstonesrationalized at 2.5 per cent. Full exemption from Basic Customs Duty to pre-forms ofprecious and semi-precious stones.

To encourage exports, pre-forms of precious and semi-precious stones exempted frombasic customs duty.

Export duty on bauxite increased from 10 per cent to 20 per cent.

Basic Customs Duty on some stainless steel flat products is being increased 5 per cent to7.5 per cent.

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Energy

Conventional Energy:

With 78 per cent of total demand of crude met through imports, India needs to resort toimport dependency. To meet ever growing demand for petroleum products, the GOIhas endeavored to enhance exploration and exploitation of petroleum resources,along with developing a concrete and structured distribution and marketing system.

Electricity generation by power utilities grew by 6 per cent in 2013-14.

The overall long term demand for coal is closely linked to the performance of the mainend use sectors, i.e. thermal power, iron & steel and cement. Sharp deceleration in theproduction of natural gas in the past two-three years has further increased the energysector’s dependence on coal.

Shale Gas can emerge as an important new source of energy, as India holds severalshale formations.

Rs. 100 crore is allocated for a new scheme ‘Ultra-Modern Super Critical Coal BasedThermal Power Technology.’

New & Renewable Energy:

Rs 500 crores provided for Ultra Mega Solar Power Projects in select states.

A Green Energy Corridor Project is being implemented to facilitate evacuation ofrenewable energy across the country.

Concessional basic customs duty of 5 per cent extended to machinery and equipmentrequired for setting up of a project for solar energy production.

Specified inputs for use in the manufacture of EVA sheets and back sheets and flatcopper wire for the manufacture of PV ribbons exempted from basic customs duty.

Reduction in basic customs duty & SAD on selected parts and raw materials used in themanufacture of wind operated generators.

Concessional basic customs duty of 5 per cent and exemption of Excise Duty onmachinery and equipment required for setting up of compressed biogas plants.

17

BFSI

Time bound program as Financial Inclusion Mission to be launched on 15 August 2014with focus on the weaker sections of the society.

Banks to be encouraged to extend long term loans to infrastructure sector with flexiblestructuring.

Banks to be permitted to raise long term funds for lending to infrastructure sector withminimum regulatory pre-emption such as CRR, SLR and Priority Sector Lending.

RBI to create a framework for licensing small banks and other differentiated banks.

Differentiated banks serving niche interests, local area banks, payment banks etc. arecontemplated to meet credit and remittance needs of small businesses, unorganizedsector, low income households, farmers and migrant work force.

Kissan Vikas Patra to be reintroduced.

A National Savings Certificate with insurance cover to provide additional benefits forthe small saver introduced.

Service provided by recovery agents (Bank, FIIs, and NBFC) brought under reverse

charge mechanism.

Service Tax exemption available for specified micro insurance schemes expanded tocover all life micro-insurance schemes where the sum assured does not exceed Rs.50,000 per life insured.

18

Telecommunication & IT

A series of reform measures by the Government, innovation in wireless technology andactive participation by the private sector played an important role in the growth of thetelecom sector in the country.

Central Government Departments and Ministries to integrate their services with the e-Biz,a single window IT platform for services on priority by 31 December 2014.

Policy for better spectrum management through trading and sharing of spectrum needsto be looked into so as to bring down the cost of spectrum.

Pan India program ‘Digital India’ with an outlay of Rs. 500 crore to be launched.

Program for promoting ‘Good Governance’ to be launched with a sum of Rs. 100 crore.

Rs. 100 crore allocated for 600 new and existing Community Radio Stations.

Film & Television Institute, Pune and Satyajit Ray Film & Television Institute, Kolkata areproposed to be accorded status of Institutes of national importance and a ‘NationalCentre for Excellence in Animation, Gaming and Special Effects’ to be set up.

Corpus of Rs. 200 crore to be set up to establish Technology Centre Network .

A nationwide ‘District level Incubation and Accelerator Program’ to be taken up forincubation of new ideas and necessary support for accelerating entrepreneurship.

Rs. 100 crore is provided to set up a Technology Development Fund for Defense.

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Service Sector

Growth of Service sector closely linked to FDI inflows and the role of transnationalfirms.

India’s share in Service Exports grown from 0.6 per cent in FY 1990 to 3.3 per cent in FY2013. Export of financial services is on a high sky in FY 2013.

No formal source to count inflation in Service Sector. (Service Price Indices (SPI) havebeen developed in few sectors like Telecom, Railways, Postal and Banking onexperimental basis)

Share and Growth of India Service Sector (Provisional Estimate for 2013-14)

Healthcare

Services by technical testing of newly developed drugs on human participantsbrought under service tax.

For safe disposal of medical and clinical wastes, services provided by commonbiomedical waste treatment facilities exempted.

Top Sectors % Share

Trade, hotels and restaurants 24.00

Financing, insurance, real estate & business services 18.50

Community, social and personal services 14.50

Constructions 7.80

Total Services GDP 64.80

Total GDP 100.00

Services

Others

India GDP composition 2013-14

20

Other Sectors

Rural Development:

Initial sum of Rs. 100 crore for ‘Start Up Village Entrepreneurship Program’ for encouragingrural youth to take up local entrepreneurship programs.

Skill Development

A School Assessment Program is being initiated at a cost of Rs. 30 crore.

Rs. 100 crore provided for setting up virtual classrooms as Communication Linked Interfacefor Cultivating Knowledge (CLICK) and online courses.

Rs. 500 crore provided for setting up 5 more IITs in Jammu, Chhattisgarh, Goa, AndhraPradesh and Kerala.

5 IIMs in the States of Himachal Pradesh, Punjab, Bihar, Odisha and Rajasthan.

Skill India to be launched to skill the youth with an emphasis on employability andentrepreneur skills.

Automobiles

ED on parts of tractors transferred/removed within two factories of the same manufacturerof tractor is being exempted.

Consumer & Capital Goods

Full exemption from customs duty is granted to de-oiled soya extract and oil cake/oil cakemeal of groundnut, sunflower, canola, mustard and rice bran, up to 31st December 2014.

Steps taken to boost domestic production of electronic items and reduce ourdependence on imports. These include imposition of basic customs duty on certain itemsfalling outside the purview of IT Agreement, exemption from SAD on inputs/ componentsfor PC manufacturing, imposition of education cess on imported electronic products forparity, etc.

Color picture tubes exempted from basic customs duty to make cathode ray TVs cheaper

and more affordable to weaker sections.

To encourage production of LCD and LED TVs below 19 inches in India, basic customs dutyon LCD and LED TV panels of below 19 inches reduced from 10 percent to Nil.

21

Taxation Proposals

22

Direct Tax proposals

Individual Income- tax below 60 years

Total income Tax rates

< 250,000 Nil

> 250,000 < 500,000 10%

> 500,000 < 1,000,000 20%

> 1,000,000 30%

Individual Income- tax over 60 years

Total income Tax rates

< 300,000 Nil

> 300,000 < 500,000 10%

> 500,000 < 1,000,000 20%

> 1,000,000 30%

How will the change impact you ( example for individual < 60 years )

Income FY 13-14 FY 14-15 Savings

210,000* 1,000 Nil 1,000

550,000 40,000 35,000 5,000

1,200,000 190,000 185,000 5,000

* Impact of rebate not considered

Individual Income- tax

• Need was felt to encourage household savings that fell from 33.7 per cent in FY2009-10 to 30.1 per cent in FY 2012-13. To boost such savings it is proposed to raisethe limit of investment linked deduction under section 80C of the Act from Rs.100,000 to Rs.150,000. Consequently, the investment limits under PPF scheme havebeen revised to Rs. 150,000.

• In order to mitigate the high cost housing finance for middle and lower middleclass, deduction limit for interest on loan in respect of self occupied houseproperty from Rs.150,000 to Rs.200,000.

23

Direct Tax proposals

Corporate Income- tax

Grossing up of Dividend Distribution Tax (DDT) ( w.e.f. 1 October 2014)The company declaring dividend will have to shell out additional taxes as now it isproposed to gross up the dividend amount.

Manufacturing IncentiveTo encourage investment in manufacturing sector an additional deduction of 15 percent under Section 32AC of the Act to continue till the block of FY 2016-17 instead ofFY 2014-15. The limit of minimum Rs. 100 crore investment has been revised to Rs. 25crore per year prospectively.

Tax holiday for power sectorExtension of the sunset clause for the power sector up till 31 March 2017.

Real Estate Investment Trust (REIT) and Infrastructure Investment Trust (Invit)Conducive tax regime for new categories of investment vehicles namely the REITand Invit have been specified.

Advance for transfer of capital assetIncome generated due to forfeiture of advances for transfer of capital asset to betaxable as ‘Income from other Sources’. Consequently, no reduction in cost to beclaimed by the transferor while actual sale of the capital asset

Corporate Social ResponsibilityCSR expenditure though incurred for the purposes of Companies Act, 2013 cannotbe allowed under the existing provisions of Income- tax Act unless that are incurredfor the purpose of business and meeting the requirements of Section 30 to Section 36of the Act.

Disallowance of expenditure for non- deduction of taxesTime limit for payment of taxes deducted from payments made to non residents,proposed to be extended up to the date of filing of Return of Income under Section139(1) of the Act.

Disallowance on non payment of tax at source on payments made to residents tobe restricted to 30 per cent of the amount of expenditure claimed.

Scope of disallowance under this provision extended to expenditure on salaries,director fees and all other expenditure taxable under XVIIB of the Act

24

Direct Tax proposals

Transfer Pricing and International taxation

Roll Back of Advance Pricing Agreement (APA) [w.e.f. 1 October 2014]A roll back provision refers to the applicability of the futuristic methodology ofdetermination of ALP to the past international transactions. Such a roll back hasbeen proposed for past four proceeding financial years from the previous year forwhich the APA applies.

Introduction of concept of rangeInter-quartile range as a concept of benchmarking international transaction isfollowed widely internationally. The same is proposed to be implemented as a partof transfer pricing provisions replacing the concept of arithmetic mean with limiteduse of provisions of arithmetic mean where comparable are inadequate. The sameis under analysis and appropriate rules would be framed.

Multiple year dataCurrently only one year data is permitted to be used for benchmarking. The same isproposed to be amended for use of multiple year data. This will also be in line withinternational practices.

Amendment to the definition of International TransactionSection 92B(2) covers agreements between two unrelated parties with substantialinfluence from related parties generally referred to as ‘deemed internationaltransactions’. To end an uncertainty on whether such unrelated party to be aresident or non- resident, it is proposed to amend the definition to include non-residents and residents in unrelated parties.

Concessional tax rate on dividends received from foreign companiesWith an incentive for attracting repatriation of dividend income earned by Indiancompanies from investments made abroad concessional rate of 15 per cent hasbeen continued.

Concessional rate of tax on overseas borrowing (194 LC) [w.e.f. 1 October 2014]Concessional rate of withholding tax of 5 per cent to long term infrastructure bondsis now proposed to be extended to any long term bond

Advance Ruling to apply to resident private companies

25

Indirect Tax proposals

Service Tax

Scope of ‘Custom and Central Excise Settlement Commission’ to extend to Servicetax.

Power of Service Tax Authorities enhanced in case of search and seizure by grantingpowers to any other officer notified by board.

Service provided by Director to body corporate brought under the reverse chargemechanism.

Services provided by the Employees’ State Insurance Corporation for the period priorto 1 July 2012 exempted, from service tax.

Re-credit of CENVAT credit allowed if export proceeds are received within one yearfrom the end of specified period.

Value of service portion in works contract relating to movable and immovableproperty aligned to 70 per cent (w.e.f. 1 October 2014).

Variable interest rates (18 per cent to 30 per cent) to be applicable for delay inpayment of tax (w.e.f. 1 October 2014).

Time-limit for taking CENVAT credit on input and input services shall be six months fromdate of invoice or challan or other documents specified.

Point of taxation as per Rule 7 on reverse charge to be amended to be the date ofpayment or the date subsequent to end of three months from the date of invoice,whichever is earlier (w.e.f. 1 October 2014).

Abatement rate to be revised to 60 per cent in case of transport of goods by vessel(w.e.f. 1 October 2014).

Excise and customs:

The scheme of Advance Ruling in indirect taxes to be expanded to cover residentprivate limited companies. The scope of Settlement Commission to be enlarged tofacilitate quick dispute resolution.

‘Indian Customs Single Window Project’ to facilitate trade, to be implemented.

Mandatory fixed pre-deposit of 7.5 per cent of the duty demanded (includingpenalty) for filing appeal with the Commissioner (Appeals) or the Tribunal at the firststage and 10 per cent for filing second stage appeal before the Tribunal (subject to atotal ceiling of Rs. 10 crore).

On failure to pay duty within a period of one month from the due date, penalty ispayable at the rate of 1 per cent of the duty not paid for each month.

26

Glossary

27

CAD – Current Account Deficit NHAI – National Highway Authority of India

GDP – Gross Domestic Product NH – National Highway

FCNR – Foreign Currency Non Residential MMDR – Mines and Minerals Development and Regulation

CPI – Consumer Price Index FY – Financial Year

BOP – Balance of Payments BE – Budget Estimate

POL – Petroleum, Oil & Lubricants ECB – External Commercial Borrowing

YOY – Year On Year RBI – Reserve Bank of India

IMF – International Monetary Fund US FED – United States Federal Reserve

GST – Goods and Services Tax GOI – Government of India

FIPB – Foreign Investment Promotion Board CVD – Counter Veiling Duty

FDI – Foreign Direct Investment ED – Excise Duty

MSME – Micro Small and Medium Enterprises CRR – Cash Reserve Ratio

LIG – Low Income Group SLR – Statutory Liquidity Ratio

REITS – Real Estate Investment Trusts PSL – Priority Sector Lending

Invits – Infrastructure Investment Trusts KVP – Kisan Vikas Patra

CSR – Corporate Social Responsibility FII – Foreign Institutional Investor

NHB – National Housing Board BN – Billion

MGNREGA – Mahatma Gandhi National Rural Employment Guarantee Act

NBFC – Non Banking Financial Corporation

EWS – Economically Weaker Section FDI – Foreign Direct Investment

PPP – Public Private Partnership FPI – Foreign Portfolio Investor

IT – Information Technology IIT – Indian Institute of Technology

BFSI – Banking, Financial Services and Insurance

DGCI&S – Director General of Commercial Intelligence & Statistics

IIM – Indian Institute of Management SAD – Special Additional Duty

CAGR – Compounded Annual Growth Rate AAR – Authority for Advance Ruling

The Act – Income Tax Act, 1961