Union Budget 2013-14 Highlights (Indirect Taxes) given below
INDIRECT TAXES
1) There will be no change in the peak rate of basic customs duty of 10 percent for non-agricultural products. There will also be no change in the normal rate of excise duty of 12 percent and the normal rate of service tax of 12 percent.
2) Leather and leather goods is a thrust sector for exports, proposed to reduce the duty on specified machinery for manufacture of leather and leather goods, including footwear, from 7.5 percent to 5 percent.
3) To encourage exports, proposed to reduce the duty on pre-forms of precious and semi-precious stones from 10 percent to 2 percent.
4) There is an affluent class in India that consumes imported luxury goods such as high end motor vehicles, motorcycles, yachts and similar vessels. on this category proposed to increase the duty on such motor vehicles from 75 percent to 100 percent; on motorcycles with engine capacity of 800cc or more from 60 percent to 75 percent; and on yachts and similar vessels from 10 percent to 25 percent.
5) The baggage rules permitting eligible passengers to bring jewellery was last amended in 1991. Gold prices have risen since, and passengers have complained of harrasment. Hence, It has proposed to raise the duty-free limit to `50,000 in the case of a male passenger and `100,000 in the case of a female passenger, subject to the usual conditions.
6) In the case of cotton, there will be zero duty at the fibre stage also and, in the case of spun yarn, there will be a duty of 12 percent at the fibre stage. The ‘zero excise duty route’ will be in addition to the CENVAT route now available.
7) proposed to totally exempt handmade carpets and textile floor coverings of coir or jute from excise duty.
8) increase the specific excise duty on cigarettes by about 18 percent. Similar increases are proposed on cigars, cheroots and cigarillos.
9) proposed to increase the excise duty on SUVs from 27 percent to 30 percent. However, the increase will not apply to SUVs registered as taxis.
10) proposed to increase the excise duty on SUVs from 27 percent to 30 percent. However, the increase will not apply to SUVs registered as taxis.
11) The excise duty rate on marble was fixed in 1996. Keeping in view the increase in prices of marble, I propose to increase the duty from `30 per sq. mtr to ` 60 per sq mtr.
12) Mobile phones priced at more than `2000, proposed to raise the duty to 6 percent.
13) To reduce valuation disputes, proposed to provide for MRP based assessment in respect of branded medicaments of Ayurveda, Unani, Siddha, Homeopathy and bio-chemic systems of medicine. There will be an abatement of 35 percent.
14) proposed to include only two services which deserve to be in the negative list. They are vocational courses offered by institutes affiliated to the State Council of Vocational Training and testing activities in relation to agriculture and agricultural produce.
15) propose to levy service tax on all air conditioned restaurants.
16) Homes and flats with a carpet area of 2,000 sq.ft. or more or of a value of `1 crore or more are high-end constructions where the component of ‘service’ is greater. proposed to reduce the rate of abatement for this class of buildings from 75 percent to 70 percent. Existing exemptions from service tax for low cost housing and single residential units will continue.
17) proposed to introduce a one-time scheme called ‘Voluntary Compliance Encouragement Scheme’. A defaulter may avail of the scheme on condition that he files a truthful declaration of service tax dues since 1.10.2007 and makes the payment in one or two installments before prescribed dates. In such a case, interest, penalty and other consequences will be waived.
DIRECT TAXES
1) some relief to the tax payers in the first bracket of `2 lakh to `5 lakh. Assuming an inflation rate of 10 percent and a notional rise in the threshold exemption from `2,00,000 to `2,20,000, proposed to provide a tax credit of `2,000 to every person who has a total income upto `5 lakh.
surcharge of 10 percent on persons whose taxable income exceeds `1 crore per year. This will apply to individuals, HUFs, firms and entities with similar tax status.
2) surcharge from 5 percent to 10 percent on domestic companies whose taxable income exceeds `10 crore per year. In the case of foreign companies, who pay the higher rate of corporate tax, the surcharge will increase from 2 percent to 5 percent.
3) Dividend distribution tax or tax on distributed income, increase the current surcharge of 5 percent to 10 percent.
4) The additional surcharges will be in force for only one year, that is Financial Year 2013-14.
5) The education cess for all tax payers shall continue at 3 percent.
6) Tax benefit to the first-home buyer who takes a loan for an amount not exceeding `25,00,000. to allow such home buyers an additional deduction of interest of `100,000 to be claimed in AY 2014-15. If the limit is not exhausted, the balance may be claimed in AY 2015-16. This deduction will be over and above the deduction of `150,000 allowed for self-occupied properties under section 24 of the Income-tax Act.
7) Eligibility conditions of life insurance policies for persons suffering from disability or certain ailments by increasing the permissible premium rate from 10 percent to 15 percent of the sum assured. This relaxation shall be available in respect of policies issued on or after 1.4.2013.
8) Donations made to the National Children’s Fund will now be eligible for 100 percent deduction.
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