Union budget 2017

Union budget 2017

Arun Jaitley encouraged Make in India, digital payments; all eyes now on GST rollout.
On the backdrop of the recent demonetisation and the ensuing introduction of the Goods and Service Tax (GST), the finance minister presented the Budget for 2017-18, classifying these two as the tectonic policy initiatives of the government.
As introduction of the GST is looking possible from July 1, the industry was not anticipating major changes in indirect taxes. As expected, Arun Jaitley did not make any major changes in the area of indirect taxes. The budgetary changes proposed are limited to tweaking of rates/duties, correction of inverted duty structure, changes on the procedural aspect, etc.
However, the finance minister has used the opportunity to achieve the stated objectives of the government such as encouraging the Make in India initiative, correcting the inverted duty structure, promoting cashless transaction and the interest of public health by imposing additional taxes on tobacco.
In order to encourage Make in India and reduce costs, the finance minister has reduced custom duties on LNG, nickel, and machinery required in the specified renewable energy sector. Further, to address the problem of the inverted duty structure in textiles, chemicals and petrochemicals, metals and renewable sectors, the basic custom duty has been reduced on inputs/raw materials. Towards encouraging cashless transactions, PoS machines and parts and components of such machines have been exempted from customs duties.
On the excise duty front, the rate of duty has been increased on cigars, pan masala, etc. Further, products promoting the digital economy such as micro ATMS, fingerprint scanner, PoS card reader for mPOS and their parts have been exempted from the excise duty.
One key amendment is repealing of the Research and Development Cess Act and corresponding removal of exemption from service tax w.r.t import of technology from April 1, 2017. By this amendment, the imported technology will cost less as the non- creditable R&D cess is replaced by creditable service tax.
As expected, the finance minister reiterated the commitment to implement the GST and mentioned that extensive efforts to reach out to trade and industry would commence from April 1, 2017. Jaitley expressed satisfaction with the level of progress being made towards implementation of the GST and IT-related preparedness.
Overall, this Budget is neutral on government revenues as far as the indirect tax collections are concerned. It is apt to say now that all eyes are set on the introduction of the final GST laws in the Budget session to pave way for the implementation of GST from July 1.