Managerial Economics - Fiscal Policy
Indirect Taxes - Fiscal Policy
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Service tax confronts challenges of its share being below its potential, complexity in tax law, and need to bring it closer to Central Excise Law for eventual transition to GST.
Indirect Taxes
Service tax confronts challenges of its share being below its potential, complexity in tax law, and need to bring it closer to Central Excise Law for eventual transition to GST. Overwhelming response to the new concept of taxing services based on negative list.
1.
Proposal to tax all services
except those in the negative list comprising of 17 heads.
2. Exemption from service tax is proposed for some sectors.
3. Service tax law to be shorter by nearly 40 per cent.
4. Number of alignment made to harmonize Central Excise and Service Tax. A common simplified registration form and a common return comprising of one page are steps in this direction.
5. Revision Application Authority and Settlement Commission being introduced in
6. Utilization of input tax credit permitted in number of services to reduce cascading of taxes.
7. Place of Supply Rules for determining the location of service to be put in public domain for stakeholders’ comments.
8. Study team to examine the possibility of common tax code for Central Excise and Service Tax.
9. New scheme announced for simplification of refunds.
10. Rules pertaining to point of taxation are being rationalized.
11. To maintain a healthy fiscal situation proposal to raise service tax rate from 10 per cent to 12 per cent, with corresponding changes in rates for individual services.
12. Proposals from service tax expected to yield additional revenue of `18,660 crore.
13. Excise duty on large cars also proposed to be enhanced. No change proposed in the peak rate of customs duty of 10 per cent on nonagricultural goods.
14. To stimulate investment relief proposals for specific sectors - especially those under stress.
Service Tax
Service tax confronts challenges of its share being below its potential, complexity in tax law, and need to bring it closer to Central Excise Law for eventual transition to GST. Overwhelming response to the new concept of taxing services based on negative list.
2. Exemption from service tax is proposed for some sectors.
3. Service tax law to be shorter by nearly 40 per cent.
4. Number of alignment made to harmonize Central Excise and Service Tax. A common simplified registration form and a common return comprising of one page are steps in this direction.
5. Revision Application Authority and Settlement Commission being introduced in
Service Tax for dispute resolution.
6. Utilization of input tax credit permitted in number of services to reduce cascading of taxes.
7. Place of Supply Rules for determining the location of service to be put in public domain for stakeholders’ comments.
8. Study team to examine the possibility of common tax code for Central Excise and Service Tax.
9. New scheme announced for simplification of refunds.
10. Rules pertaining to point of taxation are being rationalized.
11. To maintain a healthy fiscal situation proposal to raise service tax rate from 10 per cent to 12 per cent, with corresponding changes in rates for individual services.
12. Proposals from service tax expected to yield additional revenue of `18,660 crore.
Other Proposals For Indirect Taxes
13. Excise duty on large cars also proposed to be enhanced. No change proposed in the peak rate of customs duty of 10 per cent on nonagricultural goods.
14. To stimulate investment relief proposals for specific sectors - especially those under stress.
Agriculture
and Related Sectors: Basic customs duty reduced for
certain agricultural equipment and
their parts; Full exemption from basic customs duty for import of equipment for
expansion or setting up of fertilizer projects up to March 31, 2015.
Infrastructure: Proposal for full exemption from basic customs duty and a concessional CVD of 1 per cent to steam coal till 31st March, 2014. Full exemption from basic duty provided to certain fuels for power generation.
Mining: Full exemption from basic customs duty to coal mining project imports. Basic custom duty proposed to be reduced for machinery and instruments needed for surveying and prospecting for minerals.
Railways: Basic custom duty proposed to be reduced for equipments required for installation of train protection and warning system and upgradation of track structure for high speed trains.
Roads: Full exemption from import duty on certain categories of specified equipment needed for road construction, tunnel boring machines and parts of their assembly.
Civil Aviation: Tax concessions proposed for parts of aircraft and testing equipment for third party maintenance, repair and overhaul of civilian aircraft.
Manufacturing: Relief proposed to be extended to sectors such as steel, textiles, branded readymade garments, low-cost medical devices, labour-intensive sectors producing items of mass consumption and matches produced by semi-mechanized units.
Health and Nutrition: Proposal to extend concessional basic customs duty of 5 per cent with full exemption from excise duty/CVD to 6 specified life saving drugs/vaccines. Basic customs duty and excise duty reduced on Soya products to address protein deficiency among women and children. Basic customs duty and excise duty reduced on Iodine. Basic customs duty reduced on Probiotics.
Environment: Concessions and exemptions proposed for encouraging the consumption of energy-saving devices, plant and equipment needed for
Infrastructure: Proposal for full exemption from basic customs duty and a concessional CVD of 1 per cent to steam coal till 31st March, 2014. Full exemption from basic duty provided to certain fuels for power generation.
Mining: Full exemption from basic customs duty to coal mining project imports. Basic custom duty proposed to be reduced for machinery and instruments needed for surveying and prospecting for minerals.
Railways: Basic custom duty proposed to be reduced for equipments required for installation of train protection and warning system and upgradation of track structure for high speed trains.
Roads: Full exemption from import duty on certain categories of specified equipment needed for road construction, tunnel boring machines and parts of their assembly.
Civil Aviation: Tax concessions proposed for parts of aircraft and testing equipment for third party maintenance, repair and overhaul of civilian aircraft.
Manufacturing: Relief proposed to be extended to sectors such as steel, textiles, branded readymade garments, low-cost medical devices, labour-intensive sectors producing items of mass consumption and matches produced by semi-mechanized units.
Health and Nutrition: Proposal to extend concessional basic customs duty of 5 per cent with full exemption from excise duty/CVD to 6 specified life saving drugs/vaccines. Basic customs duty and excise duty reduced on Soya products to address protein deficiency among women and children. Basic customs duty and excise duty reduced on Iodine. Basic customs duty reduced on Probiotics.
Environment: Concessions and exemptions proposed for encouraging the consumption of energy-saving devices, plant and equipment needed for
Tags : Managerial Economics - Fiscal Policy
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