KNM Budget Highlights 2017

India Budget 2017-18 - Highlights
Highlights - India Budget 2017-18

&
Economic Survey 2016-17
Disclaimer: Information in this note is intended to provide only a general
update of the subjects covered. It is not intended to be a substitute for
detailed research or the exercise of professional judgment. KNM accepts no
responsibility for loss arising from any action taken or not taken by anyone
using this publication.
Page |1
An independent member of AGN International.
Agenda for 2017-18: “Transform, Energise and Clean India”

– TEC India
ACHIEVEMENTS OF 2016-17
War against black money launched
Greater transparency
Inflation under control
Demonetisation of high denomination currency notes
Enactment of Insolvency and Bankruptcy Code
Preparation for GST - proposed to be introduced in 2017-18
Railway budget merged with General Budget
MAJOR CHALLENGES 2017-18
 The US Federal Reserve intention to increase the policy rates more than
once in 2017, may lead to lower capital inflows and higher outflows
from the emerging economies.
 Uncertainty around commodity prices especially that of crude oil, has
implications for the fiscal situation of emerging economies.
 The signs of increasing retreat from globalization of goods, services and
people, as pressures for protectionism are building up. These
developments have the potential to affect exports from a number of
emerging markets, including India.
Page |2
Fund allocation
for schemes
promoting
agriculture Dairy
Drugs and increased Processing and
Cosmetics notably Infrastructure
Rules to be Development
amended Fund to be set
up in NABARD
Legislative
reforms Few take Stress on
proposed to
simplify and
aways from infrastructure
development
amalgamate Budget and basic needs
existing labour
laws
2017-18 in rural areas
Education and
Fund to be
employment
created for
through skill
Railway
Aadhar based strengthening
Passengers'
smart cards of Youth
safety
containing targeted.
health details
for senior
citizens
Foreign Investment Promotion Board to be abolished in 2017-18 and further

liberalisation of FDI policy is under consideration
Legislative changes to be made to confiscate the properties of assets of big time/

economic offenders who flee from India
Cyber Security proiritized- Computer Emergency Response Team for Financial

Key Sector (CERT-Fin) to be established
Changes
related to Shares of Railway PSEs like IRCTC, IRFC and IRCON to be listed on Stock
Exchangesin 2017-18
Finance
Sector Common application form for registration, opening of bank and demat
accounts, and issue of PAN for Foreign Portfolio Investors
Income tax for companies with annual turnover upto Rs. 500 million is reduced
to 25%
No transaction above Rs. 3 lakh would be permitted in cash subject to certain

exceptions
Page |3
HIGHLIGHTS OF INDIAN BUDGET 2017-18 PRESENTED BY UNION

FINANCE MINISTER SHRI ARUN JAITLEY ON FEBRUARY 01, 2017 IN
THE PARLIAMENT
BUDGET ESTIMATES (BE) 2017 -18

 Gross Tax receipts are estimated at Rs. 21,210 billion, Tax revenue receipts
are estimated at Rs. 12,270 billion. Non-tax revenue receipts are estimated at
Rs. 2,887 billion and capital receipts including borrowings will be Rs. 6,181
billion.
 Total expenditure proposed at Rs. 21,470 billion. Abolition of Plan-Non Plan

classification of expenditure and focus is now on Revenue and Capital
expenditure.
 Allocation for Capital expenditure increased by 25.4% over the previous year.
 Total resources being transferred to the States and the Union Territories with
Legislatures is Rs. 4110 billion against Rs. 3600 billion in BE 2016-17
 Fiscal Deficit kept at 3.2% of GDP for 2017-18 as compared to 3.5% in RE

2016-17 with commitment to achieve 3% in following years.
 Revenue Deficit kept at 2.1% of GDP for 2017-18 as compared to 2.3% in RE

2016-17. The Revenue Deficit for next year is pegged at 1.9%, against 2%
mandated by the FRBM Act.
 Net Market Borrowing of Government restricted to Rs. 3480 billion for 2017-
18 much lower than Rs. 4250 billion for the previous year.
OVERVIEW OF THE ECONOMY

 According to The International Monetary Fund (IMF) forecast, India is
expected to be one of the fastest growing major economies in 2017.
 IMF has projected a GDP growth of 7.2% and 7.7% in 2017 and 2018
respectively. The World Bank, however, is more optimistic and has projected a
GDP growth of 7% in 2016-17, 7.6% in 2017-18 and 7.8% in 2018-19.
 Economy has moved on a high growth path. India‟s Current Account Deficit
declined from about 1% of GDP last year to 0.3% of GDP in the first half of
2016-17.
 The CPI Inflation has come down to 3.4% in December, 2016 as compared to
6% in July, 2016 and expected to remain within RBI‟s mandated range of 2%
to 6%.
 An increase in Foreign Direct Investment (FDI) by 36% from Rs. 1,070 billion
in the first half of last year to Rs. 1,450 billion in the first half of 2016-17.
Page |4
 As on January 20, 2017, Foreign exchange reserves reached 361 billion US

Dollars representing a comfortable cover for about 12 months of imports.

 India has become the sixth largest manufacturing country in the world, as
from ninth previously according to Business Report of World Bank, World
Investment Report 2016 of UNCTAD, Global Competitiveness Report of 2015-
16 and 2016-17 of the World Economic Forum etc.
DIRECT TAX PROPOSALS
PERSONAL INCOME TAX
 No change in income tax slab rates for F.Y. 2017-18 for

Individuals/HUF/AOPs.
Existing Slab Rates Proposed Slab Rates

Income (INR) Rate of Income (INR) Rate of
Tax Tax
Up to Rs 250,000* NIL Up to Rs 250,000* NIL
Rs. 250,001 to Rs. 500,000 10% Rs. 250,001 to Rs. 500,000 5%
Rs. 500,001 to Rs. 1,000,000 20% Rs. 500,001 to Rs. 1,000,000 20%
Above Rs. 1,000,000 30% Above Rs. 1,000,000 30%
 Tax slabs for Individuals/ HUF/ AOPs are as under:
*Basic exemption in case of Senior Citizen (Age 60 Years to 79 Years) is Rs.

300,000 and very senior citizen (Age 80 Years or more) is Rs. 500,000. There
is no change in the exemption for 2017-18.
 Additional Surcharge amounting to 10% of tax payable is levied on categories

of individuals whose annual taxable income is between Rs. 5 Million to Rs. 10
Million.
 Surcharge will remain at 15% on persons, other than companies, firms and
cooperative societies having income above Rs. 10 Million.
 Education cess continues to be 3% of Tax Payable (Basic and Surcharge).
 Rebate u/s 87A has been reduced to Rs. 2,500 from Rs. 5,000 for an assessee
having income up-to Rs. 350,000 only.
 Threshold limit has been increased from Rs. 10 Million to Rs. 20 Million for
audit of business entities opting for presumptive method of income tax.
 Presumptive Taxation Scheme u/s 44AD of Income Tax Act cover assesses
having turnover of upto Rs. 20 Million. At present 8% of their turnover is
counted as deemed income. In respect to turnover by non-cash means,
deemed income will be reduced from 8% to 6%. This benefit will be applicable
in current year (FY 2016-17) also.
 Professionals with receipts up to Rs. 5 Million can pay advance tax in one
single instalment instead of four.
Page |5
 For maintenance of books for individuals and HUF, threshold limit for
turnover increased from Rs. 1 Million to Rs. 2.5 Million or threshold limit for
income increased from Rs. 120,000 to Rs. 250,000.
 One-page form to be filed as Income Tax Return for the category of Individuals
having taxable income up-to Rs. 500,000 other than business income.
 No scrutiny in the first year for a person filing his income tax return for the
first time unless Department has some specific information regarding his high
value transaction.
 Loss from house property can be set off against income under any other head
up to Rs. 200,000 for any assessment year. The remaining loss to be carried
forward for set off against house property income for eight assessment years.
 The provision of clause 4 of section 10 of the Income-tax Act, 1961 regarding

definition of “person resident outside India” to be amended so as to make the
correct reference to Foreign Exchange Management Act (FEMA).
 No person shall receive in cash an amount Rs. 300,000 or more from a single
person in a day or in respect of single transaction.
CAPITAL GAIN TAX
 Holding period for considering long term capital gain from immovable property
is reduced to 2 years from 3 years.
 Base year for indexation shifted from April 01, 1981 to April 01, 2001 for all
classes of assets including immovable property.
 In case of joint development agreement signed for development of property,

the liability to pay capital gain tax will arise in the year the project is
completed.
 Any money, immovable property or specified movable property received

without consideration or with inadequate consideration, by any person,
subject to certain exemption and exceptions, shall be taxable if its value
exceeds Rs. 50,000.
 In case of transfer of unquoted equity shares, where the fair market value
determined in the prescribed manner is less than the consideration received,
such fair market value shall be the deemed value of consideration for the
purpose of computation of capital gains.
 Exemption from long term capital gains in case of transfer of listed shares
shall be available if security transaction tax has been paid at the time of
acquisition of such shares acquired after 1st October, 2004.
 In case of asset held by trust or an institution under provisions of Chapter

XII-EB of the Income-tax Act, for the purpose of computation of accreted
income, fair market value of the asset shall be taken as the cost of acquisition
of that asset.
Page |6
 It is proposed to exempt capital gains arising out of transfer of a rupee

denominated bond by a non-resident to a non-resident.
 Cost of acquisition of share of an Indian company in the hands of demerged

foreign company shall be taken as the cost of acquisition in the hands of
resulting foreign company.
INCENTIVES & TAX DEDUCTIONS
 Self-employed individual shall be eligible for deduction up-to twenty per cent
of his gross total income in respect of contribution made to National Pension
System Trust.
 Proposed to exempt Income of the Chief Minister‟s Relief Fund or the

Lieutenant Governor‟s Relief Fund from tax.
 Proposed to provide a sun set clause in respect of deduction allowed to certain

persons in respect of investment in listed equity shares and listed units of an
equity oriented fund.
CORPORATE INCOME TAX
 In order to give a boost to SME‟s & MSME‟s sector it is proposed to reduce

Income tax rate from 30% to 25% for smaller companies having turnover upto
Rs. 500 Million.
 Proposed to allow carry forward of Minimum Alternate Tax (MAT) upto a

period of 15 years instead of 10 years at present.
 An alignment of book profit with IND-AS is proposed for the purpose of levy of
MAT.
 Proposed to provide that carry forward of losses for start-ups can be claimed
for any three consecutive assessment years out of seven years instead of five
years earlier beginning from the year in which such eligible start-up is
incorporated.
 In case of start-ups for carry forward of losses, condition of continuous

holding of 51% of voting rights has been relaxed subject to the condition that
the holding of the original promoter/promoters continues.
 Limit for allowance of cash expenditure reduced from existing Rs. 20,000 to
Rs. 10,000.
 Tax neutrality in case of conversion of preference shares of a company into

equity shares of that company.
 Concessional tax rate upto 10% for companies having income arising from
sale of carbon credit. No expenditure or allowance in respect of such income
shall be allowed.
Page |7
 In case of Banking sector, provision for Non-Performing Asset (NPA) increased

from 7.5% to 8.5%.
TRANSFER PRICING
 Interest paid by an Indian Company or permanent establishment of a foreign

company to its associates enterprise, in excess of 30% of earnings before
interest, taxes, depreciation and amortisation (EBITDA), or interest paid to its
associated enterprise, whichever is less, shall not be allowed as deduction in
computing its taxable profit. The interest so disallowed to be carry forward
and set off for eight assessment years.
 In order to align the transfer pricing provisions with OECD transfer pricing
guidelines and international best practices, it is proposed to insert a new
section to provide that the assesse shall make secondary adjustment where
the primary adjustment exceeds Rs. 10 Million.
 Proposed to restrict the scope of Domestic Transfer Pricing only if one of the
entities, involved in related party transaction, enjoys specified profit-linked
deduction.
Tax Deducted at Source (TDS) or Withholding Tax
 TDS @ 5% to be deducted by Individual and HUF, in case of rent paid exceeds

Rs. 50,000 a month.
 Propose to exempt Insurance agent from TDS provision subject to filing of self-
declaration that their income is below taxable limit.
 Proposed to lower the TDS rate to 2% from 10% in case payments made to a
person engaged only in the business of operation of call centre.
 Extension of period from June 06, 2017 to June 06, 2020 for concessional
rate of TDS @ 5% on interest earned by foreign entities in external commercial
borrowings or in bonds and Government securities. This benefit is also
extended to Rupee Denominated (Masala) Bonds.
 In order to strengthen the TCS regime, it is proposed to provide that the

collectee shall furnish his PAN to the collector, failing which; tax shall be
collected at a higher rate.
INTERNATIONAL TAX
 Subject to fulfilment of certain conditions, sale of leftover stock of crude oil in

case of strategic petroleum reserve after the expiry of agreement or the
arrangement shall not be liable to tax in India in case of foreign company.
REDUCING LITIGATION AND PROVIDING CERTAINTY IN TAXATION
 In order to make refund claim process expeditious, time period for revising a tax
return has been reduced to twelve months from completion of financial year.
Similarly for scrutiny assessments, time period has been compressed from 21
Page |8
months to 18 months for Assessment Year 2018-19 and further to 12 months

for Assessment Year 2019-20 and onwards.
 In order to ensure timely filing of returns of income, it is proposed to levy a fee

in case of delay in filing the return.
 A penalty of ten thousand rupees for each default is proposed in case an

accountant or a merchant banker or a registered valuer furnishes incorrect
information in a report or certificate.
 An entity like Investor Protection Funds, Core Settlement Guarantee Fund,

Tea/Coffee/Rubber Boards, MPEDA, or APDEA; enjoying exemption from levy of
income-tax under section 10 of the Income-tax Act shall be required to furnish
return of their income.
 An amount of foreign tax credit (FTC) allowed against the tax paid under
sections 115JB or 115JC of the Income-tax Act exceeds the amount of FTC
admissible against the tax payable by the assesse on his income in accordance
with the other provisions of the Act, such excess credit shall be ignored while
computing the amount of credit under section 115JAA or section 115JD.
 In a case where the foreign tax credit has not been granted to the assesse on the
ground that payment of such tax is in dispute, it is proposed to provide
additional time to the Assessing Officer for allowing the said tax credit after
such dispute is settled.
 Proposed to omit section 197(C) of the Finance Act, 2016 which provided for
assessment of undisclosed income relating to any period prior to
commencement of the Income Declaration Scheme, 2016.
OTHER PROVISIONS
 Proposed to merge the Authority for Advance Ruling (AAR) for Income-Tax
with AAR for Customs, Central Excise and Service Tax and create common
AAR.
 The Government has accepted proposal of Special Investigation Team (SIT)

that no transaction above Rs. 300,000 should be permitted in cash.
Page |9
INDIRECT TAX PROPOSALS
GOODS AND SERVICE TAX
 The GST Council has finalised its recommendations on almost all the issues
based on consensus on the basis of 9 meetings held. Preparation of IT system
for GST is also on schedule.
 The extensive reach-out efforts to trade and industry for GST will start from
April 01, 2017 to make them aware of the new taxation system.
 Centre, through the Central Board of Excise & Customs, shall continue to
strive to achieve the goal of implementation of GST as per schedule.
SERVICE TAX
Exhaustive analysis of Amendment in Service Tax related provisions proposed

by Finance Act 2017 or Union Budget 2017 in a Tabular Format:-
Particulars Changes Existing Proposed

Services provided or agreed to be provided by the Army, Naval
and Air Force Group Insurance Funds by way of life insurance
Relief to the armed to members of the Army, Navy and Air Force under the Group
forces of the Union Insurance Schemes of the Central Government is being 14% Nil
from service tax exempted from service tax from 10th September, 2004 (the
date when the services of life insurance became taxable).
Notification No. 41/2016-ST dated 22.09.2016,which has

exempted from service tax, one time upfront amount (called as
premium, salami, cost price, development charges or by
Dispute resolution,
whatever name) payable for grant of long-term lease of
certainty of
industrial plots (30 years or more) by State Government
taxation and 14% Nil
industrial development corporations/undertakings to
avoidance of
industrial units, is proposed to be made effective from
litigation
1.6.2007 (the date when the services of renting of
immovable property became taxable).
Rule 2A of the Service Tax (Determination of Value) Rules,

2006 is proposed to be amended from 01.07.2010 so as to
Dispute resolution,
make it clear that value of service portion in execution of
certainty of
works contract involving transfer of goods and land or
taxation and 4.20% 4.20%
undivided share of land, as the case may be, shall not include
avoidance of
value of property in such land or undivided share of land.
litigation
Under the Regional Connectivity Scheme (RCS), exemption

from service tax is being provided in respect of the amount of
Promotion of viability gap funding (VGF) payable to the airline operator for
Regional providing the services of transport of passengers by air,
Connectivity embarking from or terminating in a Regional Connectivity 14% Nil
Scheme of Ministry Scheme (RCS) airport, for a period of one year from the date of
of Civil Aviation commencement of operations of the Regional Connectivity
Scheme (RCS) airport as notified by Ministry of Civil
Aviation.
P a g e | 10
Particulars Changes Existing Proposed
The exemption in respect of services provided by Indian

Institutes of Management (IIMs) by way of two year full time
residential Post Graduate Programs (PGP) in Management for
Rationalization the Post Graduate Diploma in Management (PGDM), to 14% Nil
Measures which admissions are made on the basis of the Common
Admission Test (CAT), conducted by IIMs ,is being extended
to include non-residential programs.
Explanation-I (e) to Rule 6 of CENVAT Credit Rules, 2004 is

being amended so as to exclude banks and financial
Rationalization
institutions including non-banking financial companies
Measures
engaged in providing services by way of extending deposits,
loans or advances from its ambit.
The Negative List entry in respect of “services by way of
carrying out any process mounting to manufacture or
production of goods excluding alcoholic liquor for human
Consumption”, in the Finance Act, 1994, is proposed to be
Rationalization
omitted and instead placed in the exemption notification. Nil Nil
Measures
Consequently, clause (40) of section 65B of the Finance Act,
which defines process amounting to manufacture‟is also
proposed to be omitted and instead placed in the exemption
notification.
CUSTOM DUTY & EXCISE
Exhaustive analysis of Amendment related to Central Excise Duty and

Custom Duty proposed to be carried out by Finance Act 2017 or Union
Budget 2017 in a Tabular Format:-
CUSTOM DUTY:-
Commodity Rate of Duty

From To
I. Incentivizing domestic value addition, ‘Make in India’
A. Reduction in Customs duty on inputs and raw materials to reduce costs
Mineral fuels and Mineral oils
1. Liquefied Natural Gas BCD – 5% BCD – 2.5%
Chemicals & Petrochemicals
2. Medium Quality Terephthalic Acid (MTA) & Qualified BCD – 7.5% BCD – 5%
Terephthalic Acid (QTA)
Metals
3. Nickel BCD – 2.5% BCD – Nil
Finished Leather
4. Vegetable tanning extracts, namely, Wattle extract BCD – 7.5% BCD – 2.5%
and Myrobalan fruit extract
Capital Goods
5. *Ball screws, linear motion guides BCD – 7.5% BCD – 2.5%
6. CNC systems for use in the manufacture of CNC BCD – 10% BCD – 2.5%
machine tools.
Renewable Energy
7. **All items of machinery required for fuel cell based BCD – 10% BCD – 5%
P a g e | 11

From To
power generating systems to be set up in the country /7.5%
or for demonstration purposes. CVD – 6%
CVD – 12.5%
8. **All items of machinery required for balance of BCD – 10% BCD – 5%
systems operating on biogas/ bio-methane/ by- /7.5%
product hydrogen. CVD – 6%
CVD – 12.5%
Miscellaneous
9. *All parts for use in the manufacture of LED lights or Applicable BCD – 5%
fixtures, including LED lamps. BCD, CVD CVD – 6%
10. *All inputs for use in the manufacture of LED Driver Applicable 5%
and MCPCB for LED lights or fixtures, including BCD
LED lamps.
Chemicals & Petrochemicals
11. o-Xylene BCD – 2.5% BCD – Nil
12. *2-Ethyl Anthraquinone [2914 69 90] for use in BCD – 7.5% BCD – 2.5%
manufacture of hydrogen peroxide.
13. *Vinyl Polyethylene Glycol (VPEG) for use in BCD – 10% BCD – 7.5%
manufacture of Poly Carboxylate Ether.
Textiles
14. **Nylon mono filament yarn for use in monofilament BCD – 7.5% BCD – 5%
long line system for Tuna fishing.
Metals
15. *Co-polymer coated MS tapes / stainless steel tapes BCD – Nil BCD – 10%
for manufacture of specified telecommunication
grade optical fibres or optical fibre cables.
16. *MgO coated cold rolled steel coils [7225 19 90] for BCD – 10% BCD – 5%
use in the manufacture of CRGO steel
17. *Hot Rolled Coils [7208] for use in the manufacture BCD – 12.5% BCD – 10%
of welded tubes and pipes falling under heading
7305 or 7306.
Automobiles
18. *Clay 2 Powder (Alumax) for use in ceramic BCD – 7.5% BCD – 5%
substrate for catalytic convertors.
Renewable Energy
19. Solar tempered glass for use in the manufacture of BCD – 5% BCD – Nil
solar cells/panels/modules
20. *Parts/raw materials for use in the manufacture of CVD – 12.5% CVD – 6%
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.
21. *Resin and catalyst for use in the manufacture of BCD – 7.5% BCD – 5%
cast components for Wind Operated Energy CVD – 12.5% CVD – Nil
Generators [WOEG] SAD – 4% SAD – Nil
Miscellaneous
22. *Membrane Sheet and Tricot / Spacer for use in the CVD – 12.5% CVD – 6%
manufacture of RO membrane element for
household type filters.
Changes in Customs duty to provide adequate protection to domestic industry
Food Processing
23. Cashew nut, roasted, salted or roasted and salted. BCD – 30% BCD – 45%
Electronics / Hardware
24. Populated Printed Circuit Boards (PCBs) for use in SAD – Nil SAD – 2%
P a g e | 12

From To
the manufacture of mobile phones.
Miscellaneous
25. RO membrane element for household type filters. BCD – 7.5% BCD – 10%
Promotion of cashless transactions and promote domestic manufacturing of devices used
therefor
26. a) Miniaturized POS card reader for m-POS (not Applicable BCD – Nil
including mobile phones or tablet computer), BCD, CVD CVD – Nil
b) Micro ATM as per standards version 1.5.1, SAD SAD – Nil
c) Finger Print Reader / Scanner, and
d) Iris Scanner
27. Parts and components for manufacture of: Applicable BCD – Nil
a) miniaturized POS card reader for m-POS (not BCD, CVD CVD – Nil
including mobile phones or tablet computer), SAD SAD – Nil
b) micro ATM as per standards version 1.5.1,
d) Iris Scanner
Imposition of export duty to conserve domestic resources
28. Other aluminium ores, including laterite Nil 15%
Improving ease of doing business and Export Promotion
29. De-minimis customs duties exemption limit for Duty payable CIF value not
goods imported through parcels, packets and letters not exceeding exceeding
Rs.100 per Rs.1000 per
consignment consignment
30. Limit of duty free import of eligible items for 3% of FOB 5% of FOB
manufacture of leather footwear or synthetic value of said value of said
footwear or other leather products for use in the goods goods exported
manufacture of said goods for export. exported during the
during the preceding
preceding financial year
financial year
Anti-avoidance measure
31. Silver medallion, silver coins, having silver content CVD – Nil CVD – 12.5%
not below 99.9%, semi-manufactured form of silver
and articles of silver.
*subject to actual user condition **subject to certain specified conditions
EXCISE:

From To
Public Health : Tobacco and Tobacco Products
1. Cigar and cheroots 12.5% or Rs.3755 per 12.5% or Rs.4006 per thousand,
thousand, whichever is higher whichever is higher
2. Cigarillos 12.5% or Rs.3755 per 12.5% or Rs.4006 per thousand,
thousand, whichever is higher whichever is higher
3. Cigarettes of tobacco Rs.3755 per thousand Rs.4006 per thousand
substitutes
4. Cigarillos of tobacco 12.5% or Rs.3755 per 12.5% or Rs.4006 per thousand,
substitutes thousand, whichever is higher whichever is higher
5. Others of tobacco 12.5% or Rs.3755 per 12.5% or Rs.4006 per thousand,
substitutes thousand, whichever is higher whichever is higher
6. Paper rolled biris – Rs.21 per thousand Rs.28 per thousand
handmade
7. Paper rolled biris – Rs.21 per thousand Rs.78 per thousand
machine made
P a g e | 13
Incentivizing domestic value addition, Make in India
Aspects Particulars Existing Proposed
Renewable All items of machinery required for balance of systems operating

12.50% 6%
Energy on biogas/bio-methane/by-product hydrogen
Membrane Sheet and Tricot/Spacer for use in the manufacture of

RO membrane Element for household type filters, subject to 12.50% 6%
actual user Condition.
All parts for use in the manufacture of LED lights or fixtures, Applicable
6%
Including LED lamps, subject to actual user Condition duty
a. Waste and scrap of precious metals or metals clad with

Miscellaneous* precious metals arising in course of manufacture of goods failing
in Chapter 71
b. Strips, wires, sheets, plates and foils of silver.
c. Articles of silver jewelry other than those studded with
diamond, ruby, emerald or sapphire. Nil
d. Silver coin of purity 99.9% and above, bearing a brand name
when manufactured from silver on which appropriate duty of
customs or excise has been paid
Miniaturized POS card reader for m-POS (not including mobile

phones or tablet computers), micro ATM as per standards version
Promotion of 1.5.1, Finger Print Reader / Scanner, and Iris Scanner
cashless
transactions
and promote Applicable
Parts and components for manufacture of: Nil
domestic duty
manufacturing a) Miniaturized POS card reader for m-POS (not including
of devices mobile phones or tablet computers),
used therefor b) Micro ATM as per standards version 1.5.1,
d) Iris Scanner
 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
P a g e | 14
PROGRAMS AND SET-UPS

Agriculture Sector
 Target for agricultural credit in 2017-18 has been fixed at a record level of Rs.
10,000 Billions.
 The coverage of Fasal Bima Yojana will be increased from 30% of cropped area
in 2016-17 to 40% in 2017-18 and 50% in 2018-19.
 The coverage of National Agricultural Market (e-NAM) will be expanded from

the current 250 markets to 585 APMCs. Assistance up to a ceiling of Rs.7.5
million will be provided to every e-NAM market for establishment of cleaning,
grading and packaging facilities.
 A Dairy Processing and Infrastructure Development Fund would be set up in

NABARD with a corpus of Rs. 80 billion over 3 years. Initially, the Fund will
start with a corpus of Rs. 20 billion.
 Government will set up new mini labs in Krishi Vigyan Kendras (KVKs) and
ensure 100% coverage of all 648 KVKs in the country to benefit to farmers for
Issuance of Soil Health Cards.
 A dedicated Micro Irrigation Fund will be set up in NABARD to achieve the

goal, „per drop more crop‟. The Fund will have an initial corpus of Rs. 50
billion.
 The Long Term Irrigation Fund already set up in NABARD will be augmented
by 100% to take the total corpus of this Fund to Rs. 400 billion.
Rural Development
 An increased allocation of Rs. 48.14 billion has been proposed under the
scheme Deendayal Upadhyaya Gram Jyoti Yojana to achieve 100% village
electrification by May 01, 2018.
 It is proposed to complete 10 million houses by 2019 for the allocation for

Pradhan Mantri Awaas Yojana – Gramin from Rs. 150 billion in BE 2016-17
to Rs. 230 billion in 2017-18.
 A sub mission of the National Rural Drinking Water Programme (NRDWP) has
been proposed to provide safe drinking water to over 28,000 arsenic and
fluoride affected habitations in the next four years.
Youth
 SWAYAM platform will be launched with at least 350 online courses to enable
students to virtually attend the courses taught by the best faculty, access
high quality reading resources, participate in discussion forums, take tests
and earn academic grades.
P a g e | 15
 It has also been proposed to free the CBSE, AICTE and other premier
institutions from administrative responsibilities and establish a National
Testing Agency as an autonomous and self-sustained premier testing
organisation to conduct all entrance examinations for higher education
institutions.
 In 2017-18, it is proposed to launch the Skill Acquisition and Knowledge

Awareness for Livelihood Promotion programme (SANKALP) at a cost of Rs. 40
billion. SANKALP will provide market relevant training to 35 million youth.
 The next phase of Skill Strengthening for Industrial Value Enhancement

(STRIVE) will also be launched in 2017-18 with initial budget of Rs. 22 billion.
Others
 Mahila Shakti Kendra will be set up with an allocation of Rs. 5 billion in 1.4
million ICDS Anganwadi Centres.
 Under Maternity Benefit Scheme Rs. 6,000 each will be transferred directly to
the bank accounts of pregnant women who undergo institutional delivery and
vaccinate their children.
 For senior citizens, Aadhar based Smart Cards containing their health details
will be introduced.
 National Housing Bank will refinance individual housing loans of about 200
billion in 2017-18.
 Two new All India Institutes of Medical Sciences (AIIMS) to be set up in

Jharkhand and Gujarat.
 Legislative reforms will be undertaken to simplify, rationalise and amalgamate

the existing labour laws into 4 Codes on (i) wages (ii) industrial relations (iii)
social security and welfare and (iv) safety and working conditions.
 The Drugs and Cosmetics Rules proposed to be amended to ensure availability

of drugs at reasonable prices and promote use of generic medicines
FINANCIAL SECTOR
 Since more than 90% of the total FDI inflows are now through the automatic
route and India has reached a stage where FIPB can be phased out. The
Foreign Investment Promotion Board to be abolished in 2017-18.
 An expert committee will be constituted to study and promote creation of an

operational and legal framework to integrate spot market and derivatives
market in the agricultural sector for commodities trading. e- NAM to be an
integral part of the framework.
 A Computer Emergency Response Team for our Financial Sector (CERT-Fin)

will be established to look after Cyber Security.
P a g e | 16
 Lending target under Pradhan Mantri Mudra Yojana to be set at Rs. 2,440
billion. Priority will be given to Dalits, Tribals, Backward Classes and
Women.
 In line with the „Indradhanush‟ roadmap, Rs. 100 billion for recapitalisation
of Banks provided in 2017-18.
 The process of registration of financial market intermediaries like mutual

funds, brokers, portfolio managers, etc. will be made fully online by SEBI.
This will improve ease of doing business.
 A new ETF with diversified CPSE stocks and other Government holdings will
be launched in 2017-18.
 Government will put in place a revised mechanism and procedure to ensure

time bound listing of identified CPSEs on stock exchanges. The shares of
Railway PSEs like IRCTC, IRFC and IRCON will be listed in stock exchanges.
 A common application form for registration, opening of bank and demat

accounts, and issue of PAN will be introduced for Foreign Portfolio Investors
(FPIs).
 Steps will be taken for linking of individual demat accounts with Aadhar.
 The commodities and securities derivative markets will be further integrated

by integrating the participants, brokers, and operational frameworks
 Proposed to create an integrated public sector „oil major‟ which will be able
to match the performance of international and domestic private sector oil
and gas companies
P a g e | 17
DIGITAL ECONOMY
By the end of 2017-18, the Government has proposed to initiate, high speed
broadband connectivity on optical fibre in more than 1,50,000 gram panchayats,
with Wi-Fi hot spots and access to digital services at low tariffs.
Also, A DigiGaon initiative will be launched to provide tele-medicine, education and

skills through digital technology.
Apart from the above following major initiatives will be undertaken by Government
to make India a digital economy:
ADHAAR DIGITAL
BHIM APP POS TERMINALS
PAY/IMPS GOVERNANCE
•Government will •A Merchant version •Proposal to
launch two new of Adhaar Enabled mandate all •Banks have
schemes to Pyament System Government targeted to
promote usage to will be launched receipts through introduce
BHIM App (Bharat Shortly. digital means, additional 10 lakh
Interface for • A mission will be beyond a new POS terminals
Money). set up with the prescribed limit. by March 2017.
•1) Referral Bonus target of 25 billion •Proposed to create
Scheme for digitsal a Payments
Individuals. transactions for Regulatory Board
•2) Cashback 2017-2018 through in the RBI by
Schemes for UPI,USSD,Adhaar replacing the
Merchants. Pay,IMPS & debit existing Board for
cards. Regulation and
Supervision of
Payment and
Settlement
Systems.
INFRASTRUCTURE AND INVESTMENT
For transportation sector as a whole, including rail, roads, shipping, budget of Rs.
2,413.87 billion has been allocated for 2017-18. This magnitude of investment will
spur a huge amount of economic activity across the country and create more job
opportunities.
SONAL INCME TAXPERSONAL INCOME TAX
RAILWAYS
For 2017-18, the total capital and development expenditure of Railways has
been pegged at Rs. 1310 billion. This includes Rs. 550 billion provided by
the Government.
Among other things, the Railways will focus on following major areas:
 Railway lines of 3,500 kms will be commissioned in 2017-18, as against 2,800

kms in 2016-17.
 For passenger safety, a Rashtriya Rail Sanraksha Kosh will be created with a
corpus of Rs. 1000 billion over a period of 5 years.
P a g e | 18
 Unmanned level crossings on Broad Gauge lines will be eliminated by 2020.
 SMS based Clean My Coach Service has already been started.
 500 stations will be made differently abled friendly by providing lifts and
escalators.
 Railways will offer competitive ticket booking facility to the public at large.
Service charge on e-tickets booked through IRCTC has been withdrawn.
Cashless reservations have gone up to 68% from 58%.
 A new Metro Rail Act will be enacted by rationalizing the existing laws.
ROADS
In the road sector, the Budget allocation for highways has been increased
from Rs. 579.76 billion in BE 2016-17 to Rs. 649 billion in 2017-18.
 2,000 kms of coastal connectivity roads have been identified for construction
and development. This will facilitate better connectivity with ports and remote
villages.
 The total length of roads, including those under PMGSY, built from 2014-15
till the current year is about 1,40,000 kms which is significantly higher than
previous three years.
 A specific programme for development of multi-model logistics parks, together

with multi model transport facilities, will be drawn up and implemented.
AVIATION
 Select airports in Tier 2 cities will be taken up for operation and maintenance
in the PPP mode.
 Airport Authority of India Act will be amended to enable effective monetisation

of land assets. The resources, so raised, will be utilised for airport up
gradation.
OTHERS
 Under the Bharat Net Project, OFC has been laid in 1,55,000 kms. In 2017-
2018 the allocation for the same has been stepped up to Rs. 100 billion.
 For strengthening our Energy sector, Government has decided to set up

Strategic Crude Oil Reserves. In the first phase, 3 such Reserves facilities
have been set up. Now in the second phase, it is proposed to set up caverns at
2 more locations, namely, Chandikhole in Odisha and Bikaner in Rajasthan.
This will take our strategic reserve capacity to 15.33 MMT.
 In solar energy, it is proposed that in second phase of Solar Park development

for additional 20,000 MW capacities.
P a g e | 19
 In solar energy, it is propose to take up the second phase of Solar Park

development for additional 20,000 MW capacity.
 A new and restructured Central scheme, namely, Trade Infrastructure for

Export Scheme (TIES) will be launched in 2017-18 to focus on export
infrastructure in competitive world.
 The total allocation for infrastructure development in 2017-18 stands at Rs.

3961.35 billion.
An eco-system to make India a global hub for electronics manufacturing is

introduced. Over 250 investment proposals for electronics manufacturing
have been received in the last 2 years, totaling an investment of Rs. 1260
billion.
P a g e | 20
Economic Survey 2016-17 Highlights
ECONOMIC SURVEY reviews the developments in the Indian economy over the
previous 12 months, summarizes the performance on major development
programmes, and highlights the policy initiatives of the Government and the
prospects of the economy in the short to medium term. Economic Survey for fiscal
2016-17 was presented in the Parliament on January 31, 2017 by the Hon‟ble
Finance Minister Mr. Arun Jaitley.
GDP projected
from 6.75% to
Gross NPAs 7.5% in 2017-18
almost 12% of
Relatively lower
gross advances.
inflation and
Centralized
Moderate
Asset
current account
Rehabilitation
deficit
Agency
recommended
Economic
Quick
remonetization
Survey Universal Basic
Income (UBI)
proposed as an
and push for
digitization
recommended
2016-17 alternative to
social welfare
schemes to
reduce poverty
Industrial
Adverse Impact
Growth to
of
moderate to
Demonetization
5.2% in 2016-17
to be
from 7.4% last
Transitional
fiscal
GROWTH ESTIMATES
Growth rate of GDP at constant market prices for the year 2016-17 is placed
at 7.1%, as against 7.6% in 2015-16
Fixed investment (gross fixed capital formation) to GDP ratio (at current
prices) is estimated to be 26.60% in 2016-17 vis-à-vis 29.30% in 2015-16.
P a g e | 21
Farm sector to grow at 4.1% in the current fiscal, up from 1.2% in 2015-16.
Implementation of wage hike, muted tax receipts to put pressure on fiscal

deficit in 2017-18.
Growth to return to normal as new currency comes in circulation.
GST and other structural reforms should take the trend growth rate to 8-10
per cent.
DEMONETISATION IMPACT
Bold and decisive strike in a series of measures to curb tax evasion, parallel
economy and arrive at a real GDP.
Demonetisation generate long-term benefits in terms of :-

 Reduced corruption
 Elimination of black money, counterfeit currency and terror funding
 Greater digitisation of the economy
 Increased flow of financial savings and greater formalisation of the
economy
 Transfer resources from tax evaders to the Government, which can use
for the welfare of the poor
 Increased capacity of Banks to lend at reduced interest rates
Adverse impact of demonetisation on GDP growth will be transitional.
Demonetisation may affect supplies of certain agricultural products like

sugar, milk, potatoes and onions.
Pace of remonetisation has picked up and will soon reach comfortable levels.
The remonetisation will ensure that the cash squeeze is eliminated by April
2017.
Demonetisation to affect growth rate by 0.25-0.5 per cent, but will generate
long-term benefits.
INFLATION
Inflation as measured by Consumer Price Index (CPI) remained under

control for the third successive financial year. The average CPI inflation
declined to 4.9% in 2015-16 from 5.9% in 2014-15 and stood at 4.8% during
April-December 2016.
P a g e | 22
Inflation based on Wholesale Price Index (WPI) declined to (-) 2.5% in 2015-
16 from 2.0% in 2014-15 and averaged 2.9% during April-December 2016.
Inflation is repeatedly being driven by narrow group of food items, of these

pulses continued to be the major contributor of food inflation.
FISCAL DEFICIT
Expecting fiscal windfall from Pradhan Mantri Garib Kalyan Yojana and low
oil prices
Fiscal gains from Goods and Services Tax (GST) will take time to realise
The 13-year old Fiscal Responsibility and Budget Management (FRBM) Act
needs to be modified to provide fiscal policy direction for “the India of
tomorrow”
TRADE & EXTERNAL DEBT
The trend of negative export growth was reversed somewhat during 2016-17
(April-December), with exports growing at 0.7% to US$ 198.8 billion. During
2016-17 (April-December) imports declined by 7.4% to US$ 275.4 billion.
Trade deficit declined to US$ 76.5 billion in 2016-17 (April-December) as

compared to US$ 100.1 billion in the corresponding period of the previous
year.
The current account deficit (CAD) narrowed in the first half (H1) of 2016-17
to 0.3% of GDP from 1.5% in H1 of 2015-16 and 1.1% in 2015-16 full year.
Robust inflows of foreign direct investment and net positive inflow of foreign
portfolio investment were sufficient to finance CAD leading to an accretion in
foreign exchange reserves in H1 of 2016-17.
In H1 of 2016-17, India‟s foreign exchange reserves increased by US$ 15.5

billion on BoP basis.
During 2016-17 so far, the rupee has performed better than most of the
other emerging market economies.
India‟s key debt indicators compare well with other indebted developing
countries and India continues to be among the less vulnerable countries.
P a g e | 23
INDUSTRY
The eight core infrastructure supportive industries, viz. coal, crude oil,
natural gas, refinery products, fertilizers, steel, cement and electricity
registered a cumulative growth of 4.9% during April-November 2016-17 as
compared to 2.5% during April-November 2015-16.
The production of refinery products, fertilizers, steel, electricity and cement

increased substantially, while the production of crude oil, natural gas fell
during April-November 2016-17.
Coal production attained lower growth during April-November 2016-17.
The performance of corporate sector (Reserve Bank of India, January 2017)

highlighted that the growth of sales grew by 1.9% in Q2 of 2016-17 as
compared to near stagnant growth of 0.1% in Q1 of 2016-17.
Net profit of corporate sector registered a remarkable growth of 16.0% in Q2

of 2016-17 as compared to 11.2% in Q1 of 2016-17.
Service sector is estimated to grow at 8.8% in 2016-17, almost the same as

in 2015-16.
OTHERS
The concept of Universal Basic Income (UBI) proposed as an alternative to

plethora of state subsidies for poverty alleviation. UBI proposal a powerful
idea, but not ready for implementation.
Recommendation of quick remonetisation, push for digitisation, bringing

land and real estate under GST ambit, reduction in taxes and stamp duties
and an improved tax administration system as key reform measures to
ensure long term economic benefits
Economic Survey 2016-17 suggests setting up of a centralised Public Sector

Asset Rehabilitation Agency that will look after the largest, most difficult
Cases, and make Politically Tough Decisions to reduce Debt.
Labour migration in India is increasing at an accelerating rate. Inter-state

labour mobility is significantly higher than previous estimates. Relatively
poorer states such as Bihar and Uttar Pradesh have high net out-migration.
FDI reform measures were implemented, allowing India to become one of the
world‟s largest recipients of FDI.
P a g e | 24
The Survey says Apparel and Leather industry are key to generation of jobs
and accordingly recommends reforms in labour and tax policies to make the
Apparel and Leather sector globally competitive. The Survey adds that these
sectors provide immense opportunities for creation of jobs for the weaker
sections, especially for women, and can become vehicles for broader social
transformation in the country.
******
P a g e | 25
Prepared by
KNM MANAGEMENT ADVISORY SERVICES PVT. LTD.
E-mail: services@knmindia.com
Web site: www.knmindia.com
Gurgaon Corporate Office : Unit No. 503, 5th level ,DLF

STAR TOWER, NH – 8, Exit 8, Sector – 30, Gurgaon,
Haryana, Tel: +91-124-4119157
Back office : #938, Lower Ground Floor, Sector-40,
Gurgaon, Haryana-122001, Tel: +91-124-4295170
Chennai Polyhose Tower, No. 86, Lower Ground Floor, Spic

Building, Mount Road Guindy, Chennai-600 032
Tel: +91-44-22201053
Ahmedabad C-601, Titanium Square, Thalltej Cross Roads, S G

Highway, Ahmedabad – 380054, Tel: +91-
9818399157
Tokyo
Ebisu Building, 4th Floor, 3-11-10, Higashi,
Shibuya-ku, Tokyo 150-0011, Japan, Tel :- +81-3-
5469-5355
P a g e | 26

KNM Budget Highlights 2017

Загружено:

Сведения о документе

Оригинальное название

Авторское право

Доступные форматы

Поделиться этим документом

Поделиться или встроить документ

Параметры публикации

Этот документ был вам полезен?

Это неприемлемый материал?

Авторское право:

Доступные форматы

KNM Budget Highlights 2017

Загружено:

Авторское право:

Доступные форматы

India Budget 2017-18 - Highlights

Highlights - India Budget 2017-18

Agenda for 2017-18: “Transform, Energise and Clean India”

War against black money launched

Inflation under control

Demonetisation of high denomination currency notes

Enactment of Insolvency and Bankruptcy Code

Preparation for GST - proposed to be introduced in 2017-18

Railway budget merged with General Budget

MAJOR CHALLENGES 2017-18

Foreign Investment Promotion Board to be abolished in 2017-18 and further

Legislative changes to be made to confiscate the properties of assets of big time/

Cyber Security proiritized- Computer Emergency Response Team for Financial

No transaction above Rs. 3 lakh would be permitted in cash subject to certain

HIGHLIGHTS OF INDIAN BUDGET 2017-18 PRESENTED BY UNION

BUDGET ESTIMATES (BE) 2017 -18

 Total expenditure proposed at Rs. 21,470 billion. Abolition of Plan-Non Plan

 Fiscal Deficit kept at 3.2% of GDP for 2017-18 as compared to 3.5% in RE

 Revenue Deficit kept at 2.1% of GDP for 2017-18 as compared to 2.3% in RE

OVERVIEW OF THE ECONOMY

 As on January 20, 2017, Foreign exchange reserves reached 361 billion US

DIRECT TAX PROPOSALS

PERSONAL INCOME TAX

 No change in income tax slab rates for F.Y. 2017-18 for

Existing Slab Rates Proposed Slab Rates

*Basic exemption in case of Senior Citizen (Age 60 Years to 79 Years) is Rs.

 Additional Surcharge amounting to 10% of tax payable is levied on categories

 Education cess continues to be 3% of Tax Payable (Basic and Surcharge).

 The provision of clause 4 of section 10 of the Income-tax Act, 1961 regarding

CAPITAL GAIN TAX

 In case of joint development agreement signed for development of property,

 Any money, immovable property or specified movable property received

 In case of asset held by trust or an institution under provisions of Chapter

 It is proposed to exempt capital gains arising out of transfer of a rupee

 Cost of acquisition of share of an Indian company in the hands of demerged

INCENTIVES & TAX DEDUCTIONS

 Proposed to exempt Income of the Chief Minister‟s Relief Fund or the

 Proposed to provide a sun set clause in respect of deduction allowed to certain

CORPORATE INCOME TAX

 In order to give a boost to SME‟s & MSME‟s sector it is proposed to reduce

 Proposed to allow carry forward of Minimum Alternate Tax (MAT) upto a

 In case of start-ups for carry forward of losses, condition of continuous

 Tax neutrality in case of conversion of preference shares of a company into

 In case of Banking sector, provision for Non-Performing Asset (NPA) increased

 Interest paid by an Indian Company or permanent establishment of a foreign

Tax Deducted at Source (TDS) or Withholding Tax

 TDS @ 5% to be deducted by Individual and HUF, in case of rent paid exceeds

 In order to strengthen the TCS regime, it is proposed to provide that the

 Subject to fulfilment of certain conditions, sale of leftover stock of crude oil in

REDUCING LITIGATION AND PROVIDING CERTAINTY IN TAXATION

months to 18 months for Assessment Year 2018-19 and further to 12 months

 In order to ensure timely filing of returns of income, it is proposed to levy a fee

 A penalty of ten thousand rupees for each default is proposed in case an

 An entity like Investor Protection Funds, Core Settlement Guarantee Fund,

 The Government has accepted proposal of Special Investigation Team (SIT)

INDIRECT TAX PROPOSALS

GOODS AND SERVICE TAX

Exhaustive analysis of Amendment in Service Tax related provisions proposed

Particulars Changes Existing Proposed

Notification No. 41/2016-ST dated 22.09.2016,which has

Rule 2A of the Service Tax (Determination of Value) Rules,

Under the Regional Connectivity Scheme (RCS), exemption

Particulars Changes Existing Proposed