The Finance Minister rose to present his third budget by stating that the global economy is weak but India has done well.

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The Finance Minister rose to present his third
budget by stating that the global economy is weak
but India has done well.
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• The Finance Minister rose to present his third
  budget by stating that the global economy is weak
  but India has done well. With a fiscal deficit
  target of not exceeding 3.5 as budgeted, the
  Finance Minister surely seems to have done his
  bit to make it happen. The Finance Minister very
  clearly seems to have focused on empowering the
  Make In India initiative by removing customs
  and excise duty exemptions on a variety of goods.
  
• The thrust seems to be more on electronics,
  hardware and the infrastructure industry where
  duty exemption has been provided to imported
  parts and components for manufacture of
  chargers/adapters, speakers (to be used for
  manufacture of mobile phones), parts components
  for use manufacture of routers, broadband modems,
  set-top boxes, DVRs, CCTV cameras etc.
• These exemptions are available only when the
  companies import such items for their actual use
  since direct import of these items (without the
  importer actually using such imported goods) has
  been made taxable on import. Prolonged litigation
  seems to have taken a toll on Governments
  administration machinery and this seems to be
  corrected by proposing a one-time Dispute
  Resolution Scheme allowing the tax payer to
  settle the tax dispute pending with the first
  appellate authority. The Budget also seems to
  encourage export of goods by not only
  announcing a widening of the duty drawback
  schemesbut also providing a retrospective
  amendment to allow refund of input service tax
  credit on services used beyond the factory gate
  for manufacture of goods subsequently exported
  out of India.

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This is a welcome measure considering the
retrospective amendments are generally towards
garnering tax rather than allowing tax benefits.
A great push has also been made to affordable
housing sector by way of exempting service tax on
construction projects involving small dwelling
units and also exempting the concrete mix
manufactured at site from 12.5 excise duty. This
is surely going to reduce the tax burden on the
sector, making cash bled housing sector a slight
fillip. The much-needed demand for reducing
interest rate on delayed payment of customs
excise duty and service tax seems to have found a
favourby the Finance Minister with the rate
getting reduced from 18 to 15 subject to few
conditions. On the aspects of ease of doing
business that has been one of the mantras of Mr.
NarendraModi to the investors, few measures seem
to be visible on a first look of the Finance
Bill. Increase in monetary limits for
prosecution, restricting the situations for
arrest of defaulting taxpayers and introducing
the provisions for deferred payment of customs
duties for certain classes of importers and
exporters seem to be a welcome measure. Overall,
the Budget seems to be quite populist with a
larger focus on creating value addition in India,
remove cascading effect by streamlining credit
mechanism and create a conducive environment for
doing business with ease.


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Source Nimish Goel Partner Head, Indirect Tax,
International Business Advisors To read more,
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