Real time impact of Budget 2017 on Indirect Tax segment remains to be seen

As a common man, many of them are interested in changes in Income Tax slabs, but to their surprise, a marginal benefit of Rs. 12,500/- was granted for people in the bracket of 2.5 lakhs to 5 lakhs by reducing rate of income tax to 5% from 10%.

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New Delhi: Finance Minister Arun Jaitley tabling the Union Budget for 2017-18 in the Parliament in New Delhi on Wednesday. PTI Photo/TV Grab

Amidst much fanfare, Union Budget introduced by the Financial Minister in today’s Parliament is path breaking in several ways like presentation was advanced to early February, Railway and Union budgets have been clubbed together and the very first time, it was wholly paperless. It is interesting that the Finance Minister started the Budget speech saying that their Government was elected with huge expectations from the People and there is lot of pressure on them to meet their expectations. As a common man, many of them are interested in changes in Income Tax slabs, but to their surprise, a marginal benefit of Rs. 12,500/- was granted for people in the bracket of 2.5 lakhs to 5 lakhs by reducing rate of income tax to 5 per cent from 10 per cent and other changes are minimal.

Coming to the Indirect taxes, the Finance Minister has acknowledged the progress so far made by the GST council along with CBEC and State Government officials and decided not to make much changes as the said laws are going to be subsumed in the GST regime which the Government is proposing to introduce w.e.f July’2017.

Historically, we can never expect a budget without changes in excise duty rate with respect to Tobacco, Gutka and Pan Masala products and the present budget is without an exception wherein Central Excise amount on these products has been increased. It also shows that the Government is committed towards National Tobacco Control efforts by increasing the prices of these products and thus deterring not to consume them.

Coming to specific impact on certain products which affect a common man, the same are discussed in the following paras: Online transactions are going to get a boost as goods having not more than CIF value of Rs. 1,000/-, imported through postal parcels, packets and letters, are exempted from payment of BCD, CVD and SAD. Prices of Imported Cashew nut, roasted, salted or roasted and salted are going be increased as basic customs duty has been increased from 30 per cent to 45 per cent.

Imported silver medallions and coins, having silver content not below less than 99.9 per cent, are going to be dearer as CVD exemption granted to the said products are withdrawn Prices of parts used in manufacture of Reverse Osmosis (RO) membrane for house hold type filters are going to be reduced as the excise duty has been reduced from 12.5 per cent to 6 per cent.

Also, as a push towards digital economy, excise duty on Micro ATM’s, fingerprint reader/ scanner, Iris scanner, miniaturized POS card reader for mPOS, along with parts and components and POS devices to manufacture these equipment’s has been exempted. So, the Consumers are going to be benefitted in this digital economy, by way of ease of doing transactions.

Reactions to the Union budget has been varied wherein the Hon’ble Prime Minister praising it as futuristic and Policy think tanks terming it as ‘growth oriented’ and the Social Media exploded over the FM’s poetic speech. While the policy of limiting political funding is historic, the real time impact on Indirect Tax segment remains to be seen as and when the GST bill with anti-profiteering clause has been passed by the Parliament. In other words, so long as the expanded credit chain and reduced tax rates mandates the organisation to reduce their prices, the ultimate customer will not be benefitted.