BUDGET 2020: InDirect Tax Proposals

• GST:

o Cash reward system envisaged to incentivise customers to seek invoice.

o Simplified return with features like SMS based filing for nil return and improved input tax credit flow to be implemented from 1st April, 2020 as a pilot run.

o Dynamic QR-code capturing GST parameters proposed for consumer invoices. o Electronic invoice to capture critical information in a centralized system to be implemented in a phased manner.

o Aadhaar based verification of taxpayers being introduced to weed out dummy or non-existent units.

o GST rate structure being deliberated to address inverted duty structure.

• Customs Duties:

o Customs duty raised on footwear to 35% from 25% and on furniture goods to 25% from 20%.

o Basic customs duty on imports of news print and light-weight coated paper reduced from 10% to 5%.

o Customs duty rates revised on electric vehicles and parts of mobiles. o 5% health cess to be imposed on the imports of medical devices, except those exempt from BCD.

o Lower customs duty on certain inputs and raw materials like fuse, chemicals, and plastics.

o Higher customs duty on certain goods like auto-parts, chemicals, etc. which are also being made domestically.

• Trade Policy Measures

o Customs Act being amended to enable proper checks of imports under FTAs.

o Rules of Origin requirements to be reviewed for certain sensitive items.

o Provisions relating to safeguard duties to be strengthened to enable regulating such surge in imports in a systematic way.

o Provisions for checking dumping of goods and imports of subsidized goods being strengthened.

o Suggestions for reviews of exemptions from customs duty to be crowd-sourced.

• Excise duty proposed to be raised on Cigarettes and other tobacco products, no change made in the duty rates of bidis.
• Anti-dumping duty on PTA abolished to benefit the textile sector