Tax Reforms in Budget 2016-2017 To Boost Ease of doing business in India are as below :
- 13 cesses levied by other Ministries/Departments and administered by the Department of Revenue, where the revenue collection from each of them is less than `50 crore in a year being abolished.
- Interest rates on delayed payment of duty/tax across all indirect taxes being rationalized at 15%, except in case of service tax collected but not deposited to the exchequer, in which case the rate of interest will be 24% from the date on which the service tax payment became due.
For assesses with taxable value during preceding year/years covered by the notice is less than ` 60 Lakh, the rate of interest on delayed payment of service tax will be 12%.
This will come into effect from date of enforcement of Finance Bill, 2016.
Category A – where not paid it will be 15% for al indirect taxes
Category B – where it is collected but not paid it will be 24% for all indirect taxes
- The exemptions from customs duties on specified goods imported for petroleum exploration under various types of licenses or mining leases, pre-NELP contracts, NELP contracts, Marginal Fields Policy and the Coal Bed Methane Policy being merged into a single exemption with a unified list of specified goods and conditions
- Nil Basic Customs Duty and Nil CVD on imports of goods required for exploration & production of hydrocarbon activities being extended to such operations undertaken under Petroleum Exploration Licenses (PEL) or Mining Leases (ML) issued or renewed before 1st April 1999.
- CENVAT Credit Rules, 2004 being amended, to improve credit flow, reduce the compliance cost and litigation, particularly those relating to apportionment of credit between exempted and non- exempted final products / services. Changes are also being made in the provisions relating to input service distributor, including extension of this facility to transfer input services credit to outsourced manufacturers, under certain circumstances. Amendments will also enable manufacturers with multiple manufacturing units to maintain a common warehouse for inputs and distribute inputs with credits to the individual manufacturing units. This will come into effect from 01.04.2016.
- Amendments being made to Central Excise and Service Tax laws so as to provide for closure of proceedings against co-noticees, once the proceedings against the main noticee have been closed, with effect from date of enforcement of Finance Bill, 2016.
- Rules prescribing procedure for import or domestic procurement of goods at concessional rates of customs and excise duties for certain specified purposes being simplified.
- Number of returns for central excise assessee, above a certain threshold, is being reduced, from 27 to 13, one annual and 12 monthly returns. The annual return will also have to be filed by service tax assessees, above a certain threshold, taking total number of returns to three in a year for them. This will come into effect from 01.04.2016.
- The facility for revision of return, hitherto available to a service tax assessee only, being extended to manufacturers also.
- The monetary limit for launching prosecution being increased to ` 2 crore of service tax evasion and the power to arrest being restricted only to situations where the tax payer has collected the tax but not deposited it to the exchequer above a certain threshold of ` 2 crore. This will come into effect from date of enforcement of Finance Bill, 2016. 65
- The Customs Act being amended to provide for deferred payment of customs duties for certain class of importers and exporters. In consultations with Ministry of Shipping, the facility of direct port delivery is being extended to more importers.
- In 2014-15 Budget, the intent to implement Indian Customs Single Window Project was announced. Significant progress has been made in that direction to implement this facility at major ports and airports starting from next financial year.
- The duty free import allowance for bona fide gifts imported by post or air or by courier service being increased. `10,000 `20,000
- Chief Commissioners of Central Excise are being instructed to file application for withdrawing prosecution in cases involving duty less than rupees five lakh and pending for more than fifteen years