1 / 17

Economic Highlights and Tax Impacts in Budget 2008

Explore the major economic highlights and the impacts of tax changes in the Budget of 2008 on direct and indirect taxes.

hdurst
Download Presentation

Economic Highlights and Tax Impacts in Budget 2008

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. 4. 7. 2. 9 6. 8. 5. 1. 3. Custom Highlights Direct Tax - Corporate Overall Impact - Indirect Tax Direct Tax - Individual Service Tax Overall Impact - Income Tax Economic Highlights Contents Excise Duty Budget – 2008 Electronic & Electrical goods

  2. Excise Duty/Sales Tax • Excise Duty:- • Excise duty rate change from 16% to 14%. • Abatement rate also changed for MRP based products. • NCCD (National Calamity contingent duty) on Cellular GSM  1.03% on MRP  payment through PLA. • Excise duty rate increased for Packaged software from 8% to 12%. • Excise duty rate decreased for small cars & Two Wheelers from 16% to 12%. Sales Tax:- • CST reduced from 3% to 2% w.e.f 1st April 2008 ( Subject to Notifications). • Brief Roadmap provided for GST by April, 2010.

  3. Service Tax • Service Tax rate  No Change  12.36%. • Exemption limit for small service provider increased from Rs. 8 -10 Lacs. (Registration required if receipts exceeds Rs.9 Lakhs.) • Cenvat Credit on Secondary Freight i.e WH to Customer’s place :- withdrawn. • Any Amt DR/CR w.r.t taxable services with Associated enterprises – payment on accrual basis – U/S 67. • Service tax rate increased for WCT contracts  from 2% to 4%. • Scope of Service Tax extended to:- • Right to use goods  Tangible Goods No Transfer of Possession & Effective control  Where ever VAT is not applicable. • Assets management Services under ULIP. • Services provided to Stock & Commodity Exchanges. • Customized Software.

  4. Service Tax • Self adjustments of excess service tax from 50K to 100K Rule 6 (4B)(iii). • Revision in time limits for Revised Return from 60 days to 90 days. Rule 7B. • Resolution Schemes  Disputes up to Rs.25K (as on 1/3/2008) – 1/7/2008 to 30/9/2008  Small Service Provider. • Packing including loading, unloading etc under cargo handling services. • Services in relation to promotion/Marketing of Games of chance. • IT related services • Consulting Engineer Services: Consultancy on Computer Hardware/Software. • Repairs, Maintenance & Management services for IT software. • Business Auxiliary Services: IT related services – software developments, up gradations, right to use of IT software, commercial exploitations.

  5. New Excise Duty rate & abatements for Electronic & Electrical Goods

  6. Impacts of reduction in Excise Duty before & after Budget on CTV

  7. Impacts on Excise Duty before & after Budget on GSM Mobile mfg:-

  8. Impacts of reduction in Excise Duty on RM in – Excise Free Zone (EFZ) Items AC CTV MRP 15000 9000 Dealer’s Price 12750 7650 Basic Price 11333 6800 Assessable Value 10800 6030 Raw Material 6347 3876 ED on Raw material Before Budget @ 16.48% 1046 639 After Budget @ 14.42% 915 559 Net reduction in Duty 131 80

  9. Impacts of reduction in Excise Duty – Benefits of EFZ VS DTA Items AC CTV MRP 15000 9000 Dealer’s Price 12750 7650 Basic Price 11333 6800 Assessable Value 10800 6030 Raw Material 6347 3876 ED on Raw material @ 16.48% (Before Budget) 1046 639 ED on Raw Material@ 14.42% (After Budget) 915 559 ED on FG @ 16.48% (Before Budget) 1730 964 ED on FG @ 14.42% (After Budget) 1557 870 Impacts on Duty Before Budget 684 325 After Budget 642 311 Net Loss in Benefits 42 15

  10. Major Economic Highlights • Tax to GDP Ratio from 9.5% (2004-05) to 12.5% (2007-08) • Fiscal Deficit estimated at 3.1% & Revenue Deficit at 1.4%. • One time Waiver of Loans to Farmers – Rs.60,000 Cr. • GDP forecast  8.7% in 2008. • Services & Manufacturing sector grow by  10.7% & 9.4% in 2008. • Inflation projected at 4.4%. • Rupee rose by 8.9% in Current Fiscal. • Capital inflows will rise by 7.7% in H1 of FY 08 as against 5.1% in FY 07. • Govt, RBI to jointly work to check capital inflow. • Education, health pillars of social sector reforms.

  11. Major Economic Highlights • Agricultural growth rate at 2.6%. • 1 lakh broadband-enabled common service centres in villages. • Allow foreign equity in Retail Trade. Meaning of Terms used in Budget :- • Fiscal Deficit:- Revenue Receipts less TTL Expenditure. • Revenue Deficit:- Revenue Receipts Less Revenue Expenditure • GDP:- Gross TTL of Goods & Services.

  12. Direct Tax - Corporate • No Change in Corporate Tax  33.99%. • FBT ( Fringed Benefits Tax):-  Continue  Some Changes • Excludes w.e.f 1st April 2009:- • Guest House Expenses, • Sponsoring Employee for Sports, • Organizing Sports events for employees, • Crèche Expenses, • Non Transferable Electronic Meal Card etc. • Festival celebration expenses ( slab changed from 50% to 20%) • Dividend distribution tax  No Changes  16.99%. • Furnished information to IT deptt of any payment to Non – resident. • Banking cash Transaction Tax withdrawn w.e.f 1st April 2009  0.1% on Rs.1 Lacs & above withdrawn per day for Company. • Date of filling of Return of Income:- 30th September ( 31st Oct) F.Y 2007 - 08.

  13. Direct Tax - Individual • Thresh hold Exemption limit of Individual Tax increased:- Men :- Rs.1.1 Lacs to 1.5 Lacs Women:- Rs.1.45 Lacs to1.80 Lacs Sr.CitiZen Rs.1.95 Lacs to 2.25 Lacs (Surcharge @ 10% above Rs.10 Lacs & 3% Education & SHE cess –Continue). • Deductions:- 80D for Medi claim Insurance for Parents  Additional Rs.15K. • STCG ( Short Term Capital Gains) rate increased 10% to 15% - Securities. Tax Slabs

  14. Direct Tax - Individual

  15. Direct Tax - Individual

  16. Budget Highlights :: Customs • No change in peak rate of customs duty, BCD remains 10%, 7.5%, 5% & 0% • EOU,STP,EHTP sale to DTA – Duty abatement reduced from 75%->50% • Convergence products i.e. MP3/ MP4 or MPEG 4 Players with radio/video reception facility – 10%  5% (Without Radio/Video already 5%) • Duty reduced to nil, on some additional items for mfg. of Set Top Box i.e. SMPS, power board, IR module. • NCC duty 1% imposed on Mobile phone. So, total duty on mobile increased from 4% to 5.07%. • Time limit for re-export u/section 74(2) reduced from 36 month to 18 months. • BCD exempted on RM and Components required for mfg. of Connectors, relays, CRT, Part of CRT, Semiconductor, Plasma display panel and Module. • Wireless data cards with PCMCIA/USB/ PCI (G-TRAN) express ports are exempted from excise duty • Excise duty on heat resistant rubber tension tape ( HRRTT) reduced from 16% to 8%

  17. Thanks

More Related