The year 2016 had been replete with changes and surprises - from the GST Constitutional Amendment to liberalisation of FDI norms across sectors and demonetisation of high-denomination currency notes. Amidst expectations of a highly reformist budget, FM Jaitley has presented the budget with his agenda of Transform, Energise and Clean India (‘TEC India’).
Terming India as a bright spot in the world economic landscape, and factors such as declining CPI inflation and current account deficit, higher FDI inflows and forex reserves contributing to India’s macro-economic stability and economic success, FM Jaitley presented his fourth budget with focus on ten distinct themes encompassing, inter alia, farmers, rural population, youth, infrastructure, digital economy and prudent fiscal management.
Here's what got cheaper and costlier:
• Generic medicines and drugs and medical devices shall be made available at reasonable prices.
• Booking railway tickets online to become cheaper due to withdrawal of service charge on e-tickets booked through IRCTC website.
• Basic customs duty on Liquefied Natural Gas (‘LNG’) has been halved to 2.5%. LNG is widely used as fuel as well as feed stock for petro-chemicals sector.
• Devices for promoting cashless transactions (POS machine cards and fingerprint/iris scanners) to become cheaper as levy of customs and excise duties waived on such devices.
• Cost of undergoing non-residential courses at Indian Institutes of Management (IIMs) set to become cheaper as IIMs have been exempted from levying service tax @ 14% on non-residential programmes.
• Solar tempered glass used in manufacture of solar panels to become cheaper due to reduction in basic customs duty from 5% to Nil.
• Prices of mobile phones to marginally go up due to proposed levy of customs duty @2% on printed circuit boards used in manufacture of mobile phones.
• LED lights / fixtures including LED lamps to become costlier due to increase in customs duties on components used in the manufacture of such products.
• Cigarettes, pan masala, cigar, bidis chewing tobacco set to become costlier upon increase in excise duties on tobacco products.
• Silver coins and medallions to become costlier due to imposition of countervailing duties of 12.5%.
In addition to the changes in tax structure for various commodities, the government has continued to tread on its path of continued focus on affordable housing, by granting infrastructure status to affordable housing, thereby enabling housing developers to avail benefits granted to the infrastructure sector. Various relaxations have been provided in respect of tax incentives available to companies engaged in developing affordable housing projects, thereby providing a boost to the affordable housing sector. Reduction in taxes on various commodities shall provide an additional boost to various government initiatives viz. promoting a digital economy, increasing solar power generation, providing affordable healthcare etc. Increase in prices of tobacco products is seen as part of a continued government effort to discourage use of tobacco. A reduction in income-tax rates for smaller companies with annual turnover upto INR 50 crore from 30% to 25%, is seen as an effort to making the Indian small and medium enterprise sector more competitive as compared to large companies.