Introduction

Direct Taxes
Rates Of Income Tax
There has been no change in the Income Tax Slabs.
Rate of Income Tax in respect of Individuals, HUF, Trusts, AOP, BOI & Artificial juridical person (AJP) in the slab of Rs.2,50,001 to Rs. 5,00,000/- has been reduced from 10% to 5%. Similarly, the reduction has been done for Senior Citizens in the slab of Rs. 3,00,001/- to Rs. 5,00,000/-.The new slab rates will be as follows for income of financial year 2017-18
Upto 250,000 |
NIL |
250,001 to 500,000 |
05% |
500,001 to 10,00,000 |
20% |
Above 10,00,000 |
30% |
Surcharge:
- A surcharge @ 10% of Income Tax has been imposed on the above category of assesses having taxable Income exceeding Rs. 50 lakhs but not exceeding Rs. 1 crore.
- Persons having Taxable Income exceeding Rs. 1 crore shall continue to pay surcharge @ 15% on Income Tax
Corporate Income Tax Rate
Domestic Companies having total turnover/Gross Receipts in the Financial year 2015- 16 of less than or equal to Rs. 50 crores shall be liable to pay Income Tax @ 25% instead of 30%. In all other cases the rate of Income Tax shall be 30%
This rebate shall be available to only resident individuals whose total income does not exceed Rs. 3,50,000 instead of Rs. 5,00,000 earlier.
Filing Of Return Of Income In Case Of Charitable Trust
Transparency In Electoral Funding
Additional conditions imposed for availing the benefits of exemption of income tax u/s 13A for the political party which is as under:
- Additional conditions imposed for availing the benefits exemption of income tax u/s 13A for the political party which is as under:
- (i) Donations of Rs.2000/- or more should only be received by an account payee cheque drawn on a bank or an account payee bank draft or use of electronic clearing system through a bank account or through electoral bonds,
- (ii) Political party furnishes a return of income for the previous year on or before the due date under section 139. Late filing of return will result into losing of exemption.
- (iii) The political parties shall not be required to furnish the name and address of the donors who contribute by way of electoral bonds.
RBI Electoral Bonds shall be bearer and encashable within time prescribed and can be purchased from a bank by payment through banking channel or digital payment.
Increasing The Threshold Limit For Maintenance Of Books Of Accounts
Measures To Discourage Cash Transactions
- Where an assesse incurs any expenditure for acquisition of any asset in respect which cash payment exceeds ten thousand rupees, such expenditure shall be ignored for the purposes of determination of actual cost u/s 43 of such asset and no depreciation u/s 32 shall be allowed upon it.
- Any expenditure of capital nature incurred wholly and exclusively in respect of specified business u/s 35AD for which cash payment exceeds ten thousand rupees, no deduction shall be allowed in respect of such expenditure.
- Reduce the existing threshold of cash payment to a person from twenty thousand rupees to ten thousand rupees in a single day u/s 40A (3). Any payment in cash above this amount shall not be allowed as a deduction.
Limit In Respect Of Provision For Bad And Doubtful Debts U/s 36(1)(viia)
Taxation of Non-Compete Fees in Case of Profession
- With a view to provide a level playing field to co-operative banks vis-à-vis scheduled banks, it is proposed to amend section 43D of the Act so as to include co-operative banks other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank.
- Any sum payable by the assessee as interest on any loan or advances from a co-operative bank other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank shall be allowed as deduction u/s 43B if it is actually paid on or before the due date of furnishing the return of income of the relevant previous year.
Computation Of Capital Gains In Case Of Real Estate Joint Development Agreement
It is also proposed u/s 194-IC in the Act so as to provide that in case any monetary consideration is payable under the specified agreement, TDS at the rate of ten per cent shall be deductible from such payment.
Widening Of Scope Of Income From Other Sources
- Section 56(2)(x) has been inserted to provide that receipt of any sum of money or any movable or immovable property by any person without consideration or for inadequate consideration in excess of Rs. 50,000 shall be chargeable to tax in the hands of the recipient under the head “Income from other sources”.
- Accordingly, the applicability of earlier Section 56(2)(vii) & 56(2)(viia) has been restricted till 1st April, 2017.
- With a view to improving compliance of provision relating to tax deduction at source (TDS), the section 58 shall provide that the provisions of section 40(a)(ia) shall apply in computing income chargeable under the head “income from other sources” as they apply in computing income chargeable under the head “Profit and gains of business or Profession”.
Non-allowability of expenditure @30% due to non-deduction of tax as per provisions of section 40(a)(ia) shall also apply in computing income chargeable under the head “income from other sources”.Disallowance introduced in section 58. (w.e.f. AY 2018-19)
Carry Forward And Set Off Of Loss In Case Of Start Up Companies.
Section 79 has been extended to provide that where a change in shareholding has taken place in a previous year in the case of a company, not being a company in which the public are substantially interested and being an eligible start-up as referred to in section 80 -IAC of this Act, loss shall be carried forward and set off against the income of the previous year, if all the shareholders of such company which held shares carrying voting power on the last day of the year or years in which the loss was incurred, being the loss incurred during the period of seven years beginning from the year in which such company is incorporated, continue to hold those shares on the last day of such previous year.
Rationalization Of Deduction Under Section 80CCG
No deduction under section 80CCG (Investment in Listed shares or listed units of equity oriented fund upto Rs. 25,000) shall be allowed from assessment year 2018-19. However, an assessee who has claimed deduction under this section for assessment year 2017-18 and earlier assessment years shall be allowed deduction under this section till the assessment year 2019-20.
Restriction On Cash Donation U/s 80G
In order to provide cash less economy and transparency, Section 80G has been amended that no deduction shall be allowed under the section 80G in respect of donation of any sum exceeding two thousand rupees (earlier it was ten thousand) unless such sum is paid by any mode other than cash.
Incentive For Affordable Housing Projects- Section 80-IBA
Section 80IBA provides 100% tax deduction of the profits on account of developing and building affordable group housing projects. Following amendments have been done :
- The size of residential unit shall be measured by taking into account the “carpet area” instead of “built up area”
- Now, the restriction of 30 square meters on the size of residential units shall not apply to the place located within a distance of 25 kms from the municipal limits of the Chennai, Delhi, Kolkata or Mumbai. The Affordable Housing Project upto 60 sq. meter carpet area will be eligible in all places other than Chennai, Delhi, Kolkata or Mumbai and within 25 km of municipal limits of those metros.
- The condition of period of completion of project for claiming deduction under this section shall be increased from existing 3 years to 5 years.
Widening Of Taxation Of Income By Way Of Dividend U/s 155BBDA
- Section 115BBDA levies tax @ 10%( on gross basis) on income by way of dividend in excess of Rs. 10 lakh in case of Resident individual, HUF or firm. This is in addition to Dividend Distribution Tax.
- It has been amended to widen the applicability to all resident assesses except domestic company and certain funds, trusts, institutions, etc.
Income From Transfer Of Carbon Credits U/s 115BBG
Minimum Alternate Tax And Alternate Minimum Tax:
Also, the amount of tax credit in respect of MAT/ AMT shall not be allowed to be carried forward to subsequent year to the extent such credit relates to the difference between the amount of foreign tax credit (FTC) allowed against MAT/ AMT and FTC allowable against the tax computed under regular provisions of Act other than the provisions relating to MAT/AMT.
Rationalisation Of Provisions Of Section 115JB In Line With Ind-AS
Further, in the case of a resulting company, where the property and the liabilities of the undertaking or undertakings being received by it are recorded at values different from values appearing in the books of account of the demerged company immediately before the demerger, any change in such value shall be ignored for the purpose of computation of book profit of the resulting company under this section.
Tcs-exemption From Tax Collection At Source In Case Of Certain Specified Buyers
Section 206C (1f) has been amended to provide exemption from the liability of collecting 1% TCS for sale of motor vehicle of value exceeding 10 lakhs where the collected is-
- The Central Government, a State Government and an embassy, a High Commission, legation, commission, consulate and the trade representation of a foreign State; or
- A local authority as defined in Explanation to clause (20) of section 10; or
- public sector company which is engaged in the business of carrying passengers.”
Strengthening Of Pan Quoting Mechanism In The TCS Regime
Section 206CC (on lines of section 206AA) is proposed to be inserted where any person (except non-residents) paying any sum, on which tax is collectable at source does not furnish his PAN then the tax shall be collected at higher of the following rates:
- twice the rate specified; or
- at the rate of 5%.
Now, non furnishing of PAN while collecting TCS would lead to higher collection of TCS as aforesaid
Reduction Of Time Limit For Revising Return
It is proposed to amend the provisions of sub-section (5) of section 139 to provide that the time limit allowed for furnishing of revised return shall be available up to the end of the relevant assessment year only. Now revised return can be filed within 1 year from end of the respective F.Y., earlier it could be filed within 2 year from the end of the relevant FY (w.e.f. A.Y. 18-19)
Rationalisation Of Section 211 And Section 234C Relating To Advance Tax
The ambit of Section 211 “for payment of advance tax in installment” has been extended; providing that professionals referred to in section 44ADA are also liable to pay advance tax in a single installment on or before the 15th of March every financial year.
Consequential amendment has also been made u/s 234C, providing levy of interest for late deposit of aforesaid installment.
Processing Of Return Within The Prescribed Time And Enable Withholding Of Refund In Certain Cases
Reason To Believe To Conduct A Search, Etc. Not To Be Disclosed
Under Section 133A (power To Survey)
Rationalisation Of The Provisions In Respect Of Time Limits For Completion Of Search Assessment
It has been provided that, the time limit for issuing notice has been increased to ten years from six years u/s 153A in case;
- The Assessing Officer has any evidence which reveal that the income, which has escaped assessment amounts to or is likely amounts to fifty lakh rupees or more in one year or in aggregate in the relevant four assessment years(falling beyond the sixth year);
- Such income escaping assessment is represented in the form of asset (land, building, securities, loan and advances or deposit in bank)
- The income escaping assessment or part thereof relates to such year or years.
It is however proposed that the amended provisions of section 153A shall apply where search under section 132 is initiated or requisition under section 132A is made on or after the 1st day of April, 2017.
Empowering Board To Issue Directions In Respect Of Penalty For Failure To Deduct Or Collect Tax At Source
Enabling Claim Of Credit For Foreign Tax Paid In Cases Of Dispute
The Assessing Officer shall amend the order of assessment, and the provisions of section 154 (rectification of order) shall, apply thereto.
Exemption- Section 10
any individual or HUF who have land under the land pooling scheme notified under the provisions of Andhra Pradesh CRDA Act, 2014, capital gains arising from the following transfer shall not be chargeable to tax under the Act:
- Transfer of capital asset being land or building or both, under the land pooling scheme.
- Sale of Land Pooling Ownership Certificate by the said persons received in lieu of land transferred under the scheme.
- Sale of reconstituted plot or land by said persons within two years from the end of the financial year in which the possession of such plot or land was handed over to the said persons.
Further Clarification: When sale takes place after the expiry of two years from the end of the financial year, the cost of acquisition of such specified capital asset shall be deemed to be its stamp duty value as on the last day of the second financial year after the end of the financial year in which the possession of the said specified capital asset was handed over to the assessee.
Section 10(38)
Long term Capital Gain Tax Exemption under this section for income arising on transfer of equity share acquired or on after 1st day of October 2004 shall be available only if the acquisition of share has been subjected to levy of to Securities Transactions Tax, except shares acquired in terms of notification to be issued. (IPO, Right issue, ESOP, Bonus, QIP issues likely to be exempted)
Corpus Donation By Exempt Entities To Other Exempt Entities
- Any amount credited or paid, out of income referred to section 11 to any other trusts or institution registered u/s 12AA being contributions with a specific direction that they shall form part of the corpus of the trust or institution, shall not be treated as application of income.
- It is also proposed to insert a proviso in clause (23C) of section 10 so as to provide similar restriction regarding non-treating the contribution as application of income as aforesaid in respect of any amount credited or paid out of their income to any trusts or institution registered u/s 12AA towards their corpus.
- Section 12A is proposed to be amended to provide that where a registered trust or an institution has adopted or undertaken modifications of the objects which do not conform to the conditions of registration; fresh registration is required to be obtained within 30 days from date of such modification or adoption in prescribed form.
Transparency In Electoral Funding
Notional Income For House Property Held As Stock-in-trade
Where the house property consisting of any building and land appurtenant thereto is held as stock-in-trade and the property or any part of the property is not let during the whole or any part of the previous year, the annual value of such property or part of the property, for the period up to one year from the end of the financial year in which the certificate of completion of construction of the property is obtained from the competent authority, shall be taken to be nil.
After one year, it shall be taxable on notional rental income basis.
Increasing The Threshold Limit For Audit U/s 44AB For 44AD Cases
Restriction On Cash Transactions Above Rs. 3 Lakhs
Section 269ST has been inserted to provide that no person shall receive an amount of three lakh rupees or more,
in aggregate from a person in a day or in respect of a single transaction or in respect of transactions relating to
one event or occasion from a person, otherwise than by an account payee cheque or account payee bank draft or use
of electronic clearing system through a bank account.
However the aforesaid limitation shall not be applicable for following transactions:
- Any receipt by Government, any banking company, post office savings bank or co-operative bank.
- Transactions of nature referred to in section 269SS;
- Such other persons or class of persons or receipts, which the Central Government may, by notification in the Official Gazette, specify
Capital Gain Tax
Cost Inflation Index
The base year for the purpose of indexation based on cost inflation index has been shifted from April 1, 1981 to April 1, 2001. This implies that for the purpose of computing indexation benefit, the cost of acquisition of any property purchased before April 1, 2001 will be deemed to be higher of actual cost or the fair market value as on April 1, 2001.
- If any asset or capital asset being investment held by non-resident, directly or indirectly, in a Foreign Institutional Investor, as referred to in clause (a) of the Explanation to section 115AD, and registered as Category-I or Category II Foreign Portfolio Investor under the SEBI, then the income derived from such investment shall not be deemed to accrue or arise in India as per explanation 5A to section 9 and it shall be out of purview of capital gain.
- Any transfer, made outside India, of a capital asset being rupee denominated bond of an Indian company issued outside India, by a non-resident to another non-resident shall be exempted from tax (in terms of section 47(viiaa)).
- Any transfer by way of conversion of preference shares of a company into equity shares of that company, shall be exempted from tax (in terms of section 47(xb) ).
- Appreciation of rupee against a foreign currency at the time of redemption of rupee denominated bond of an Indian company held by non-resident either by way of subscription or by way of secondary transfer, the said appreciation of rupee shall be ignored for the purposes of computation of full value of consideration u/s 48.
- Where consideration for transfer of share of a company (other than quoted share) is less than the Fair Market Value (FMV) of such share determined in accordance with the prescribed manner, the FMV shall be deemed to be the full value of consideration u/s 50CA (newly inserted) for the purposes of computing income under the head “Capital gains”.
- This section shall not be applicable for transfer of quoted share.“Quoted Share” means the share quoted on any recognised stock exchange with regularity from time to time, where the quotation of such share is based on current transaction made in the ordinary course of business
- U/s 54EC, Investment in any bond redeemable after 3 years which has been notified by centeral government shall also be eligible for exemption up to Rs. 50 lacs.
Deduction Under Section 80CCD In Contribution To Pension Scheme For Self-employed Individual Increased To 20%
In order to provide parity between an individual who is an employee and an individual who is self-employed, Section 80CCD has been amended to increase the upper limit of ten per cent of gross total income to twenty per cent in case of individual other than employee such deduction shall be limited to Rs. 1,00,000.
Extending The Period For Claiming Deduction By Start-ups U/s 80 IAC
The existing provisions of section 80-IAC, inter alia, provide that an eligible start-up shall be allowed a deduction of an amount equal to one hundred per cent of the profits and gains derived from eligible business for three consecutive assessment years out of five years beginning from the year in which such eligible start-up is incorporated.
In view the fact that start-ups may take time to derive profit out of their business, it is proposed to provide that deduction under section 80-IAC can be claimed by an eligible start-up for any three consecutive assessment years out of seven years (earlier 5 years) beginning from the year in which such eligible start-up is incorporated.
Transfer-pricing Changes
Whereas a result of primary adjustment to the transfer price, there is an increase in the total income or reduction in the loss, as the case may be, of the assessee, the excess money which is available with its associated enterprise, if not repatriated to India within the time, shall be deemed to be an advance made by the assessee to such associated enterprise and the interest on such advance, shall be computed as the income of the assessee.
“Secondary adjustment” means an adjustment in the books of accounts of the assessee and its associated enterprise to reflect that the actual allocation of profits between the assessee and its associated enterprise is consistent with the transfer price determined as a result of primary adjustment, thereby removing the imbalance between cash account and actual profit of the assessee. Secondary adjustment may take the form of constructive dividends, constructive equity contributions, or constructive loans.
And secondary adjustment shall not be carried out if, the amount of primary adjustment made in the case of an assessee in any previous year does not exceed one crore rupees.
The provisions shall allow for carry forward of disallowed interest expense to eight assessment years. It is proposed to provide for a threshold of interest expenditure exceeding Rs. 1 Crore which the provision would be applicable. Banks and Insurance business would be excluded. (w.e.f. AY 2018-19).
Accordingly, now the applicability of transfer pricing for domestic transactions shall not be applicable for payments made to related parties u/s 40A(2)(b). However,domestic transfer pricing remains to be applied for the transactions referred to in section 80A, 80IA(8), 80IA(10) or any other transaction as may be prescribed, if the aggregate of such transactions in the P.Y. exceeds Rs. 20 Crores
TDS – Tax Deducted At Source
- Moreover, the benefit for non-deduction of TDS u/s 197A by filling Form 15G/15H has been extended to the persons earning income from insurance commission as prescribed u/s 194D.
- The rate of 10% TDS u/s 194J has been reduced to 2 % for the persons engaged in the business of operation of call center. Now TDS u/s 194J shall be deducted @ 2 % in case the payee is engaged only in the business of operation of call centre.
- Deduction Of Tax At Source If Payment Of House Rent Exceeds Rs. 50,000
Section 194IB have been introduced providing that, TDS needs to be deducted by any individual or HUF not liable for Tax audit on the rent paid to any resident individual if the rent amount exceeds 50,000 per month or part of month @ 5% thereon.The person responsible for payment shall not be required to obtain TAN. However, Such deduction shall not exceed the amount of rent payable for the last month of the previous year or the last month of the tenancy, as the case may be.
Mandatory Furnishing Of Return By Certain Exempt Entities
It has been provided u/s 139 (4C) that, the following persons shall be required to file their income tax return mandatorily with effect from the 1st day of April, 2018:
- Investor Protection Fund referred to in clause (23EC) or clause (23ED) of section 10
- Core Settlement Guarantee Fund referred to in clause (23EE) of section 10
- Board or Authority referred to in clause (29A) of section 10.
All Companies are already mandated to file their income tax return every year whether they have taxable income or not.
Section 234F For Fee For Delayed Filing Of Return
A new Section 234F has been inserted, providing that a fee shall be leviable on late filing of income tax return in the manner as below:
- five thousand rupees, if the return is furnished on or before the 31st day of December of the assessment year;
- ten thousand rupees in any other case
- one thousand rupees, if the total income of the person does not exceed five lakh rupees
However the provisions of section 271F in respect of penalty for failure to furnish return of income shall not apply from AY 2018-19 and onwards.
Interest On Refund Due To Deductor
Provisional Attachment Of Property During Search & Seizure
Reference can also be made to valuation officer in case of search or seizure within a period of sixty days from the date of receipt of such reference u/s 132(9D) for valuation who shall estimate the FMV of the property in the manner prescribed.
Legislative Framework To Enable Centralised Issuance Of Notice And Processing Of Information Under Section 133C- To Enable Electronic Assessment
Rationalisation Of Time Limits For Completion Of Assessment, Reassessment And Re-computation
The time limit for making an order of assessment, reassessment or re-computation under section 147, in respect of notices served u/s 148 on or after the 1st day of April 2019 shall be 12 months from the end of the FY in which notice u/s 148 is served. Time limit for making an order of fresh assessment in pursuance of an order passed or received in the FY 2019-20 and onwards u/s 254 or 263 or 264 shall be 12 months from the end of the FY in which order u/s 254 is received or order u/s 263 or 264is passed by the authority referred therein.
Penalty U/s 271 J On Accountant Or A Merchant Banker Or A Registered Valuer
However, if the person proves that there was reasonable cause for the failure referred to in the said section, then penalty shall not be imposable.
Amendment Of Section 253 – Appeals To ITAT
Goods And Service Tax
- Goods and Services Tax on track as the GST Council has finalised its recommendations on almost all the issues based on consensus on the basis of 9 meetings.
- The final draft of the IGST, CGST and SGST bills will be considered by the GST Council in their meeting to be held on 18th February 2017.
- The preparation of IT system for GST is also on schedule. The extensive reach-out efforts to trade and industry for GST will start from 1st April 2017 to make them aware of the new taxation system.
- The government has preferred not to make any changes in current regime of Excise & Service Tax because the same is to be replaced by GST soon.
Central Excise Tax
Particulars/Items |
Rate of Additional Excise Duty |
pan masala |
Increased from 6 % to 9 % |
Particulars/Items |
Rate of Additional Excise Duty |
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Cigar and cheroots, Cigarillos, Cigarillos of tobacco substitutes and Others of tobacco substitutes. |
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Cigarettes of tobacco substitutes |
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Cigarettes |
Additional Excise Duty |
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Non-filter Cigarettes of length not exceeding 65mm |
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Non-filter Cigarettes of length exceeding 65mm but not exceeding 70mm |
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Filter Cigarettes of length not exceeding 65mm |
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Filter Cigarettes of length exceeding 65mm but not exceeding 70mm |
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Filter Cigarettes of length exceeding 70mm but not exceeding 75mm |
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Other Cigarettes |
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Chewing tobacco (including filter khaini), Jarda scented tobacco and Pan Masala containing Tobacco (Gutkha) |
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Unmanufactured tobacco |
Increased from 4.2% to 8.3% |
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Paper rolled biris – handmade |
Increased from Rs. 21 per Thousands to 28 per Thousands. |
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Paper rolled biris – machine made |
Increased from Rs. 21 per Thousands to 78 per Thousands. |
Particulars/Items |
Rate of Excise Duty |
Solar tempered glass for use in solar photovoltaic cells/modules, solar power generating equipment or systems, flat plate solar collector, solar photovoltaic module and panel for water pumping and other applications, subject to actual user condition* |
Increased from Nil to 6% |
Parts/raw materials for manufacture of solar tempered glass for use in solar photovoltaic cells/modules, solar power generating equipment or systems, flat plate solar collector, solar photovoltaic module and panel for water pumping and other applications, subject to actual user condition* |
Reduced from 12.5% to 6% |
Resin and catalyst for manufacture of cast components for Wind Operated Energy Generators [WOEG], subject to actual user condition* |
Reduced from 12.5% to Nil |
All items of machinery required for fuel cell based power generating systems to be set up in the country or for demonstration purposes* |
Reduced from 12.5% to 6% |
All items of machinery required for balance of systems operating on biogas/ bio-methane/ by-product hydrogen* |
Reduced from 12.5% to 6% |
Particulars/Items |
Rate of Excise Duty |
Membrane Sheet and Tricot / Spacer for use in manufacture of RO membrane element for household type filters, subject to actual user condition* |
Reduced from 12.5 % to 6% |
All parts for manufacture of LED lights or fixtures, including LED lamps, subject to actual user condition* |
Changed to 6% |
Miniaturized POS card reader for m-POS (not including mobile phones, or tablet computers), micro ATM as per standards version 1.5.1, Finger Print Reader / Scanner or Iris Scanner* |
Changed to Nil |
Parts and components for manufacture of miniaturized POS card reader for m-POS (not including mobile phones, or tablet computers), micro ATM as per standards version 1.5.1, Finger Print Reader / Scanner or Iris Scanner, subject to actual user condition* |
Changed to Nil |
|
Nil, subject to the condition that no credit of duty paid on inputs or input services or capital goods has been availed by manufacturer of such goods |
Particulars/Items |
Rate of Excise Duty |
With effect from 01.01.2017 tariff rate of excise duty on motor vehicles for transport of more than 13 persons, including driver |
Increase from 12.5 % to 27% |
Service Tax
- The Negative List entry in respect of “services by way of carrying out any process amounting to manufacture or production of goods excluding alcoholic liquor for human consumption” is proposed to be omitted. However, the same entry is being placed in exemption notification No. 25/2012 – Service Tax dated 20th June, 2012.
- Service tax exemption to taxable services provided or agreed to be provided by the Army, Naval and Air Force Group Insurance Funds by way of life insurance to members of the Army, Navy and Air Force under the Group Insurance Schemes of the Central Government, is being made effective from 10th day of September, 2004, the date when services of life insurance became taxable. Refund shall also be granted that has been collected wrongly, application for which needs to be made within 6 months.
- Benefit of the exemption notification No. 41/2016-ST dated 22.09.2016 is being extended with effect from 1.6.2007, the date when the services of renting of immovable property became taxable. Notification No.41/2016-ST dated 22.09.2016, exempts one time upfront amount (called as premium, salami, cost, price, development charges or by whatever name) payable for grant of long-term lease of industrial plots (30 years or more) by State Government industrial development corporations/undertakings to industrial units from Service Tax (Clause 127 of the Bill refers). Refund shall also be granted that has been collected wrongly, application for which needs to be made within 6 months.
- Rule 2 A of Service Tax (Determination of Value) Rules, 2006 is being amended with effect from 01.07.2010 so as to make it clear that value of service portion in execution of works contract involving transfer of goods and land or undivided share of land, as the case may be, shall not include value of property in such land or undivided share of land.
- With the object of promoting the Regional Connectivity Scheme (RCS), exemption from service tax is being provided in respect of the amount of viability gap funding (VGF) payable to the selected airline operator for the services of transport of passengers, with or without accompanied belongings, by air, embarking from or terminating in a Regional Connectivity Scheme (RCS) airport, for a period of one year from the date of commencement of operations of the Regional Connectivity Scheme (RCS) as notified by Ministry of Civil Aviation.
Cenvat Credit Rules
- Explanation-I(e) to sub-rule 3Dof Rule 6 of CENVAT Credit Rules, 2004 is being amended to exclude banks and financial institutions including NBFCs engaged in providing services by way of extending deposits, loans or advances from its ambit.
The value of service of extending the deposits, loans or advance where consideration by way of interest or discount would be considered for purpose of Rule 6. The impact is that there would be credit reversal for interest/discount income in case of banking company and a financial institution including a non-banking financial company, who are engaged in providing services by way of extending deposits, loans or advances. - New sub-rule 4 is being inserted in Rule 10 of CENVAT Credit Rules, to provide that approval of requests regarding transfer of CENVAT credit on shifting, sale, merger, etc. of the factory by the jurisdictional Dy./Assistant Commissioner of Central Excise, shall be allowed within 3 months from the date of receipt of application from the manufacturer or service provider. Further such time period could be extendable for 6 months by Principal Commissioner or Commissioner of CE if sufficient cause is shown and for reason which is recorded in writing.
Common Changes In Advance Ruling Provisions For Customs/ Central Excise/ Service Tax:
- For the purpose of Advance ruling “Authority” for Customs/ Central Excise/ Service Tax shall mean the Authority for Advance Ruling as constituted under section 245-O of the Income-tax Act, 1961.
- The Member of the Indian Revenue Service (Customs and Central Excise), who is qualified to be a Member of the Board, shall be the revenue Member of the Authority for the purposes of Customs Act.
- The applications pending before Authority for Advance Rulings (Central Excise, Customs and Service Tax) shall be transferred to the Authority from the stage at which such application or proceeding stood as on the date of such assent of the President.
- Provisions relating to vacancies not to invalidate proceedings are being omitted from Customs/ Central Excise/ Service Tax.
- Application fee for seeking advance ruling under Central Excise, Customs and Service Tax to be increased to Rs. 10,000/- from Rs. 2,500/-.
- Time of limit for Authority of Central Excise, Customs and Service Tax to pronounce its ruling has been revised to 6 months instead of 90 days.