MDM &CO.

&CO. A

DVISORS OF

BUSINESS TO CREATE VALUE

BUDGET SYNOPSIS 2015-16

COVERAGE OF SYNOPSIS

ECONOMY
DIRECT TAX
SERVICE TAX
CENTRAL EXCISE & CUSTOMS DUTY
ABOUT US

To begin with, as echoed by the Finance Minister Arun Jaitley and we quote Everyone thinks its Indias time to fly
We indeed think its India time to move in the path of growth and boost our economy. It was the budget with
highest expectation from the FinMin, and he has surely delivered to the expectations and stands firmly with the
directional budget 2015-16. The budget has boosted the confidence particularly of the infrastructure sector with its
proposed investment in the sector through various announcements. The government has placed its focus on
power by setting up 5 Ultra Mega Power Project (UMPP), education by setting up more senior secondary schools,
colleges, IITs and IIMs in different parts of the country. In summary, this is a strong intent statement to push for
growth and economic revival. In its totality and holistic view, this budget is of boosting growth, controlling prices
and building infrastructure.

ECONOMY
Economic Indicators

The real GDP growth is expected to accelerate to 7.4% making India the fastest growing large economy in
the world. GDP growth in 2015-16, projected to be in range of 8 % to 8.5% under the new series which
would be in range of 6% to 6.5% as per old series.
The Wholesale Price Index (WPI) turned negative (-0.39%) vis--vis 5.05% on Y-o-Y basis The CPI inflation
stands at 5.1 %.
The Current Account Deficit (CAD) for this year is expected to be below 1.3% of GDP.
The fiscal deficit for FY 2014-2015 is expected to be retained to the target of 4.1% of GDP. The expected
fiscal deficit & revenue deficit in F.Y 2015-16 is 3.9% and 2.8% respectively.
Foreign inflows since April 2014 have been about $55 billion, so that the foreign exchange reserves have
increased to a record $340 billion; the rupee has become stronger by 6.4% against a broad basket of
currencies; and India was the second-best performing stock market amongst the major economies.
After initiating the Jan Dhan Yojna & Swachh Bharat in the last few month, the government has decided
to concentrate on other reforms i.e. GST and JAM (Jan Dhan, Aadhar and Mobile) to transfer benefits in a
leakage proof and cashless manner. We wish that the government Make in India and Skill Inda
approach along with the focus on entrepreneurship creates a new generation which is of job creators
rather than only job seekers.
This budget truly reflects the values and priorities of the nation and its people.

DIRECT TAX
Impact on Individuals
Personal Income Tax Rates, Deductions/Exemption:
1. Income Tax Rates

No changes proposed in the rate of personal income tax in respect of income earned in the financial year 2015-16,
assessable in the assessment year 2016-17. The slab for the A.Y. 2016-17 will be as below
Senior Citizen
Very Senior Citizen
(Men & Women)
(Men & Women)
(60 years < Age <= 80 years)
(Age > 80 years)
0.00
to 2.50 lakh
NIL
NIL
2.50 lakh to 3.00 lakh
NIL
NIL
10 %
3.00 lakh to 5.00 lakh
10%
NIL
5.00 lakh to 10.00 lakh
20%
20%
20%
Above 10.00 lakh
30%
30%
30%
Income tax on short term capital gain u/s 111A (Capital gain on transfer of Equity share or Unit of equity oriented
fund ) and u/s 115 (Tax on Income of FIIs from securities or Capital gain on its transfer) is 15%
Income Range
(Figs. in Rupees)

General category
(Men & Women)
(Age <= 60 years)
NIL

Rebate u/s 87A Continued: A tax rebate of Rs 2,000 from tax calculated will be available for people having an annual income upto Rs 5 lakh.
However, this benefit of Rs 2,000 tax credit will not be available if the income exceeds Rs 5 lakh.
The education cess on income-tax @ 2% and Secondary and Higher Education Cess on tax @ 1% is proposed to be
continued for the financial year 2015-16 for all taxpayers.

It is further proposed to levy a surcharge @12% on individuals, HUFs, AOPs, BOIs, artificial juridical persons, firms,
cooperative societies and local authorities having income exceeding Rs. 1 crore.
2. Deductions/Exemptions

It is proposed to provide that investment in an account made under Sukanya Samriddhi Scheme will be
eligible for deduction u/s 80C and any payment from the scheme shall not be liable to tax. The interest
accruing on deposits in such account will be exempt from income tax and the withdrawal from the said
scheme in accordance with the rules of the scheme will be exempt from tax.
It is proposed to increase the limit of deduction u/s 80CCC of the Income tax Act on account of contribution
to a pension fund of LIC or IRDA or approved insurer from Rs. 1 lakh to Rs. 1.5 lakh.
It is proposed to increase the limit of deduction u/s 80CCD of the Income tax Act on account of contribution
by the employee to National Pension Scheme (NPS) from Rs. 1 lakh to Rs. 1.50 lakh. It is also proposed to
provide a deduction of upto Rs. 50,000 over and above the limit of Rs. 1.50 lakh in respect of contributions
made to NPS.
It is proposed to increase the limit of deduction u/s 80D of the Income tax Act from Rs. 15,000/- to
Rs. 25,000/- on health insurance premium (in case of senior citizen from Rs. 20,000/- to Rs. 30,000/-). It is
also proposed to allow deduction of expenditure of similar amount in case of a very senior citizen not
eligible to take health insurance.
It is proposed to increase the limit of deduction u/s 80DD of the Income tax Act in respect of maintenance,
including medical treatment of a dependant who is a person with disability, from Rs 50,000/- to
Rs. 75,000/-. It is also proposed to increase the limit of deduction from Rs. 1 lakh to Rs. 1.25 lakh in case of
severe disability.
It is proposed to increase the limit of deduction in case of very senior citizens u/s 80DDB of the Income-tax
Act on expenditure on account of specified diseases from Rs. 60,000/- to Rs. 80,000/-.
Section 80G is proposed to be amended to provide for 100% deduction in respect of donations made to the
National Fund for Control of Drug Abuse.
With a view to encourage and enhance peoples participation in the national effort to improve sanitation
facilities and rejuvenation of river Ganga, section 80G is proposed to be amended so as to provide 100%
deduction for donations made by any donor to the Swachh Bharat Kosh and to Clean Ganga Fund
It is proposed to increase the limit of deduction u/s 80U of the Income tax Act in case of a person with
disability, from Rs. 50,000/- to Rs. 75,000/- It is also proposed to increase the limit of deduction from
Rs. 1 lakh to Rs. 1.25 lakh in case of severe disability.
Transport allowance exemption is being increased from Rs. 800/- to Rs. 1,600 per month.
Taking into account the above deductions and exemptions a tax payer can have deduction/exemptions of
about Rs. 4, 44,200/- from his income as enumerated below:
Sr.No.

Particulars of Deductions/Exemptions

Transport allowance for the salaried class.

(Rs. 1600 p.m *12 months)
Deduction u/s 24 on Account of Interest on House property
Loan (Self Occupied Property)
Deduction u/s 80 C (Investments items like LIC, PF, PPF etc)
Deduction u/s 80 CCD
(Contribution to National Pension Scheme)
Deduction u/s 80 D (Medical Insurance premia)
TOTAL

2
3
4
5

Deductions/Exemption per annum

(Amount in Rs.)
19,200/2,00,000/1,50,000/50,000/25,000/4,442,00/-

3. Other Highlights:

It is proposed to reduce the rate of tax provided u/s 115A on royalty and Fees for technical services
payments made to non-residents from 25% to 10%.
It is proposed to abolish the Wealth Tax, which shall not be charged in respect to assessment year
commencing on or after 1st April, 2016. (AY 16-17). Wealth tax is abolished and replaced by an
additional surcharge of 2%, in cases where the income of the resident individual taxpayer exceeds
Rs. 1 crore.
With a view to curbing the generation of black money in real estate, it is proposed to amend the
provisions of section 269SS and 269T of the Income-tax Act so as to prohibit acceptance or re-payment
of advance in cash of Rs. 20,000 or more for any transaction in immovable property. It is also proposed
to provide a penalty of an equal amount in case of contravention of such provisions.

Impact on Business
Tax Rates for Corporates, Deductions/Allowance:
1. Income Tax Rates

No change in the income-tax rate for corporate. The Finance Minister has stated that over the next four years, the
corporate tax rate will reduce from 30% to 25% starting from next financial year. The education cess on income-tax
@ 3% continues. However surcharge in the case of;
Domestic companies have been increased from 5% to 7% where the income exceeds Rs. 1 Crore and from
10% to 12% where the income exceeds Rs 10 crore.
Foreign companies the surcharge will continue to be levied @ 2% if the income exceeds Rs 1 crore and is
upto Rs 10 crore, and @ 5% if the income exceeds Rs 10 crore.

2. Deduction/Investment allowance

Investment Allowance
A new section 32AD is proposed to be inserted to provide for an additional investment allowance of an amount
equal to 15% of the cost of new asset acquired and installed by an assessee, if
he sets up an undertaking or enterprise for manufacture or production of any article or thing on or after 1st
April, 2015 in any notified backward areas in the State of Andhra Pradesh and the State of Telangana; and
the new assets are acquired and installed for the purposes of the said undertaking or enterprise during the
period beginning from the 1st April, 2015 to 31st March, 2020.
This deduction shall be available over and above the existing deduction available under section 32AC of the Act.
Additional Depreciation
In order to incentivize acquisition and installation of plant and machinery for setting up of manufacturing
units in the notified backward area in the State of Andhra Pradesh or the State of Telangana, it is proposed
to allow higher additional depreciation at the rate of 35% (instead of 20%) in respect of the actual cost of
new machinery or plant (other than a ship and aircraft) acquired and installed by a manufacturing
undertaking or enterprise which is set up in the notified backward area of the State of Andhra Pradesh or
the State of Telangana on or after the 1st day of April, 2015.

 To remove the discrimination in the matter of allowing additional depreciation under section 32(1)(iia) on
plant or machinery used for less than 180 days and used for 180 days or more, it is proposed to provide that
the balance 50% of the additional depreciation on new plant or machinery acquired and used for less than
180 days which has not been allowed in the year of acquisition and installation of such plant or machinery,
shall be allowed in the immediately succeeding previous year.
3. Rationalization of T.D.S provisions and compliance

Section 192 Tax deduction on Salary (w.e.f. 01.06.2015)

It is proposed that the person responsible for making the payment of any income chargeable under the
head Salaries shall for the purposes of estimating income of the assessee or computing the tax
deductible under sub section (1), obtain from the assessee the evidence or proof or particulars of
prescribed claims (including claim for set-off of loss) under the provisions of the Act in such form and
manner as may be prescribed.
Section 194A Tax deduction on Interest other than securities (w.e.f. 01.06.2015)
Section 194A amended to expressly provide that, the exemption provided from deduction of tax from
payment of interest to members by a co-operative society (other than a co-operative bank) shall not
apply to the payment of interest on time deposits by the co-operative banks to its members.
It is proposed to amend the definition of time deposits as per section 194(3) to include recurring
deposits also. This implies that now, interest on recurring deposits is also subject to TDS.
Section 194A shall not apply to income paid by way of interest on the compensation amount awarded
by the Motor Accidents Claims Tribunal where the amount of such income does not exceed
Rs. 50,000/Section 194C Tax deduction on Payments to contracts (w.e.f. 01.06.2015)
It is proposed to amend Section 194C (6) to provide non deduction of tax for payments to a contractor
in the business of plying, hiring or leasing goods carriages, where such contractor owns ten or less than
ten goods carriages at any time during the previous year and furnishes a declaration to that effect
along with his Permanent Account Number, to the person paying or crediting such sum.
Section 194 I Tax deduction on Rent (w.e.f. 01.06.2015)
No TDS to be deducted u/s 194I where the rent is credited or paid to a business trust, being a real
estate investment trust, in respect of any real estate asset, referred to in clause (23FCA) of section 10,
owned directly by such business trust.
Section 195 Tax deduction on Other sums (w.e.f. 01.06.2015)
Section 195 has been amended to provide furnishing of information in Form 15CA and 15CB for
payments to a non resident/foreign company irrespective to the fact that whether or not those
payments were chargeable under Income tax Act.
Penalty clause: If the assessee fails to furnish such information or furnishes inaccurate information, the
assessing officer may direct that such person shall pay, by way of penalty, a sum of One Lakh Rupees. It
is also proposed to amend the provisions of section 273B of the Act to provide that no penalty shall be
imposable under this new provision if it is proved that there was reasonable cause for non-furnishing
or incorrect furnishing of information under sub-section (6) of section 195 of the Act.

Other provisions
The Finance Bill, 2015 proposes to amend the provisions of section 200A of the Act so as to enable
computation of fee payable under section 234E of the Act at the time of processing of TDS statement
under section 200A of the Act.
Provisions of section 206C have been proposed to be amended so as to allow the collector to furnish
TCS correction statement.
It is proposed by the Finance Bill, 2015 that intimation generated after processing of TCS statement
shall be subject to:
1. Rectification under section 154 of the Act
2. appealable under section 246A of the Act and
3. Deemed as notice of demand under section 156 of the Act.
It is proposed to provide that where interest is charged for any period under section 206C (7) of the Act
on the tax amount specified in the intimation issued under proposed provision, then, no interest shall
be charged under section 220(2) of the Act on the same amount for the same period.
4. Rationalization of provisions of Section 11

Under section 11 of the Act, the primary condition for grant of exemption to trust or institution in
respect of income derived from property held under such trust is that the income derived from
property held under trust should be applied for the charitable purposes in India.
Only 15% of the income can be accumulated indefinitely by the trust or institution, rest 85% of income
can only be accumulated for a period not exceeding 5 years subject to the conditions prescribed in the
section. But, due to rise in ambiguity in complying with the conditions within time, it is proposed to
amend the Act to provide the due date for filing Form 10 laid down in the conditions.
Form 10 needs to be filed before the due date of filing return of income specified under section 139 of
the Act for the fund or institution. In case the Form 10 is not submitted before this date, then the
benefit of accumulation would not be available and such income would be taxable at the applicable
rate.
Further, the benefit of accumulation would also not be available if return of income is not furnished
before the due date of filing return of income.
These amendments will take effect from the assessment year 2016-17 and subsequent assessment
years.

5. Other Highlights

It is proposed to amend section 92BA by increasing the limit of specified domestic transactions entered
into by the assessee from 5 Crores to 20 Crores rupees.
It is proposed to amend section 295(2) of the Act to provide that Central Board of Direct Taxes may
make rules to provide procedure for granting relief or deduction of tax paid in any country but India,
under section 90, 90A or 91 of the Act, against income tax payable under the Act.
The implementation of General Anti Avoidance Rule (GAAR) is proposed to be deferred by two years.
Accordingly, it would be applicable for the financial year 2017-18 (A.Y. 2018-19) and subsequent years.
Further, it is also proposed that the investments made upto 31.03.2017 shall not be subject to GAAR.
The definition for charitable purpose provided under section 2(15) is proposed to be amended to
include the activity of Yoga as a special category of activity to be considered as charitable purpose on
the lines of education
Currently, a foreign company is treated as resident of India, if during the year, control and
management of affairs is wholly situated in India. The concept of control and management is being
replaced by place of effective management (PoEM) A foreign company will now be regarded as a tax
resident of India, if its place of effective management is in India , at any time during the year, is in India

SERVICE TAX
1. Service Tax Rate (Effective date to be notified)

Particulars of Taxes
Present rates Proposed rates
Service Tax (Ser.Tax)
12%
14%
Education Cess on Ser.Tax
2%
0%
SHEC on Ser.Tax
1%
0%
Effective Rate
12.36%
14.00%
Note:
i. The 'Education Cess' and 'Secondary and Higher Education Cess' shall be subsumed in the revised rate of
Service Tax. Thus, effective increase in Service Tax rate will be from existing rate of 12.36% (inclusive of
cesses) to 14%.
ii. An enabling provision is being made to empower the Central Government to impose a Swachh Bharat Cess
on all or any of the taxable services (to be notified) at a rate of 2% of the value of such taxable services
with the objective of financing and promoting Swachh Bharat initiatives. Thus the effective rate would be
16% from such date and for such services to be notified.
2. Changes Effective from 01.03.2015
Cenvat Credit Rules, 2004

a) Time limit for taking CENVAT credit on inputs and input services increased from 6 months to 1 year.
Notification No. 6/2015- Central Excise (N.T) dtd 01.03.2015. The time line for the availment of cenvat
credit is tabulated below.
Period
Upto 31.08.2014

From 01.09.2014 to 28.02.2015

W.E.F 01.03.2015

Cenvat Credit on Inputs and input services to be taken

At any point of time after the receipt of inputs in the factory of a
manufacturer or in the premises of service provider and for the
input services on receipt of invoice , bill etc.
Within 6 months of the date of issue of any documents specified in
Rule 9(1) such as invoice, bill, etc
Within 1 Year of the date of issue of any documents specified in
Rule 9(1) such as invoice , bill etc.

b) Rule 14(1): The said rule provided for recovery of Cenvat Credit wrongly availed AND utilised along with
interest as per the provisions of Sec 73 & 75 of the finance Act. The amended rule is been divided into
limbs :
Cenvat Credit has been taken wrongly but not utilized [Rule 14(1)(i)]: The same shall be
recovered without interest
Cenvat Credit has been taken and utilized wrongly [Rule 14(1)(ii)]: The same shall be recovered
along with interest
c) Rule 14(2): The said rule provide as to when the credit taken during the month shall be deemed to
have been taken and how the utilization shall have deemed to be occurred. The said is as under
For Credit Availed/Taken: All the credits taken during a month shall be deemed to have been
taken on the last day of the month.
For Credit Utilization: The Opening balance of the month has been utilized first, and then the
Credit admissible in terms of these rules taken during the month has been utilized next. Lastly
the Credit INADMISSIBLE in terms of these rules taken during the month has been utilized.

Other issues

a) Procedure for Registration: Ne w Procedure for registration has been provided in order No. 1/2015-ST
dtd 28.02.15. Sailent features of the same are enumerated below:
PAN mandatory for taking service tax registration.
Registration to be granted within 2 days of filing Online Application.
No requirement to obtain sign and stamp of Central Excise Officer/ Superintendent.
Documents can be submitted within 15 days of online application.
b) Central Excise / Service tax assesses to be allowed to use digitally signed invoices and maintain record
electronically.
c) Existing exemption, vide notification No. 42/12-ST dated 29.6.2012, to the services provided by a
commission agent located outside India to an exporter located in India is being rescinded with
immediate effect. This is done on account of the amendments made in law in the previous budget
making the place of provision of a service provided by such agents as outside the taxable territory.
d) The facility of Advance Ruling is being extended to all resident firms by specifying such firms under
section 96A (b)(iii) of the Finance Act, 1994.
e) The scope of existing reverse charge mechanism has been expanded to include services provided by
any person to a customer who involves an aggregator. 100% of services tax to be paid by aggregator or
person representing the aggregator or person appointed by aggregator to pay service tax.
Example of aggregator is Uber, Ola cabs etc.
3. Changes Effective from 01.04.2015
Reverse Charge Mechanism (RCM)

Full Reverse charge Mechanism

a) In relation to manpower supply and security services provided by an individual, HUF, or partnership
firm to a body corporate, only service receiver to pay service tax as against present system of partial
reverse charge. In other words, it is proposed that the service receiver shall pay 100% of the service tax
amount.
b) Service Tax in respect of mutual fund agent and mutual fund distributor services shall be paid by the
assets management company or by the mutual fund receiving such services.
c) Distributor of Lottery is required to pay Service Tax in respect of agents of lottery.
Availment of Cenvat Credit in cases of Reverse charge Mechanism
The conditions for availing Cenvat Credit of service tax paid under RCM on input services has changed
frequently. The Said changes are tabulated as under.
Period
When Cenvat Credit can be availed in case of
Full RCM
Partial RCM
Upto 10.07.2014
Payment of value of input services Payment of value of input services
and service tax thereon was made.
and service tax thereon was made.
From 11.07.2014 to 31.03.2015 After service tax is paid to the After the payment of value of Input
government irrespective of the fact services and service tax paid or
as to whether the payment of value payable as indicated in invoice, bill
of services received to the service or, as the case may be challan as
provider is made or not
referred to in rule 9.
W.E.F 01.04.2015
Payment of service tax is made
Payment of service tax is made

Amendments in Abatement NotificationNo. 26/2012- ST dtd 20.6.12 vide Notification No.8/2015ST dtd 01.03.15

a) Goods Transport Agency: The person liable to pay freight or the GTA as the case may be is liable to pay
service tax. The portion of the value of services liable to tax is mentioned in the table given below:
Period
Service Tax payable on
Upto 31.03.2015
25% of value of services
W.E.F 01.04.2015
30% of value of services
b) Transport of Passengers by air, with or without accompanied belongings. The value on which the
airlines has to pay service tax is been tabulated below:
Tickets
Upto 31.03.2015
w.e.f 01.04.2015
Economy Class
On 40%
On 40%
Other than economy class
On 40%
On 60%
c) Transportation of goods in a vessel is liable to service tax at the abated rate on 40% of the value of
services but from 01.04.2015, the value on which service tax is to be paid is 30% of value of services.
The table below specifies the period and the rate applicable in this respect.
Period
Service Tax Payable on
Upto 30.09.2014
50% of value of services
From 01.10.2014 to 31.03.2015
40% of value of services
W.E.F 01.04.2015
30% of value of services
Note: The taxable portion of service of transportation by rail, road and vessel shall be as above in point
(a) & (c) subject to uniform condition of non- availment of CENVAT credit on inputs, capital goods, and
input services.
Amendments in Exemption List

Exemption from service tax

a) Services of pre-conditioning, pre-cooling, ripening etc. of fruits and vegetables.
b) Life insurance service provided by way of Varishtha Pension Bima Yojana.
c) All ambulance services provided to patients.
d) Admission to museum, zoo, national park, wild life sanctuary and tiger reserve.
e) Transport of goods for export by road from factory to land customs station.
f) Services provided by way of exhibition of movie by the exhibitor (theatre owner) to the distributor or
association of persons consisting of such exhibitor as one of its members.
Exemption withdrawn for services
a) Services provided by a mutual fund agent to a mutual fund or assets management company
b) Distribution services to a mutual fund or AMC
c) Selling or marketing agent of lottery ticket to a distributor
d) Proposed service-tax exemption for construction, erection, commissioning or installation of original
works pertaining to an airport or port withdrawn.
e) Departmentally run public telephone; guaranteed public telephone operating only local calls; Services
by way of making telephone calls from free telephone at airport and hospital where no bill is issued.

4. Other Changes
Effective from Date of Enactment of Finance Bill, 2015

a) Valuation of Taxable Services: Consideration for a taxable service shall include all reimbursable
expenditure or cost incurred and charged by the service provider. It is to be noted that expenses in the
nature of Pure Agent Will continue to be excluded from the value of taxable services if all the
conditions mentioned in Rule 5(2) of Service Tax (Determination of Value) Rules, 2006 are fulfilled.
b) Recovery of service tax (Sec 73): A new sub clause (1B) is proposed to be inserted providing where the
amount of service tax payable has been self-assessed in the return furnished but not paid; the same
can be recovered along with interest without service of notice. Sub-section (4A) that provides for
reduced penalty if true and complete details of transaction were available on specified records is being
omitted.
c) Rationalisation of Penalty: The penalty provisions as contained in the Section 76 and Section 78 as
amended are reproduced below:
Particulars

Non Evasion Cases

(Sec 76)
Penalty
Upto 10% of service tax
Service tax, interest paid within 30 days of No penalty
notice
Service tax, interest and reduced penalty 25% of penalty demanded,
paid within 30 days of order
provided such reduced
penalty also paid

Evasion Cases
(Sec78)
100% of service tax
15%
provided
such
reduced penalty also paid
25% of penalty demanded,
provided such reduced
penalty also paid

Section 80 provided for waiver of penalty if reasonable cause for failure to pay service tax was
shown to the officer has now been proposed to be deleted
Effective from Date to be Notified after the Enactment of Finance Bill, 2015
Amendments in Negative List

Inclusions of services
a) Exhibition of cinematographic film, circus, dance, or theatrical performances including drama or ballet
b) Recognized sporting events
c) Concerts, pageants, award functions, musical or sporting event not covered by the above exemption,
where the consideration for such admission is up to Rs. 500 per person.
Exclusions of services
a) Access to amusement facility providing fun or recreation by means of rides, gaming devices or bowling
alleys in amusement parks, amusement arcades, water parks, theme parks or such other places
b) Admission to entertainment event of concerts, non-recognized sporting events, pageants, music
concerts, award functions, if the amount charged is more than Rs. 500 for right to admission to such an
event
c) Contract manufacturing /job work for production of potable liquor for a consideration
d) Services provided by the Government or local authority to a business entity from the negative list.
e) Service provided by a Common Effluent Treatment Plant operator for treatment of effluent.

CENTRAL EXCISE DUTY & CUSTOMS

Central Excise Duty:
Some of the key changes in the Central Excise Duty structure are presented below:
Excise duty on rails for manufacture of railway or tram way track construction material exempted
retrospectively from March 13, 2012 to February 02, 2014.
The general rate of central excise duty of 12.36% including the cesses is being rounded off to 12.5%. The advalorem rates of excise duty lower that 12% and those higher than 12% with a few exceptions are not being
increased.
Wafers for use in the manufacture of integrated circuit modules for smart cards from 12% to 6%.
Inputs for use in the manufacture of LED drivers and MCPCB for LED lights, fixtures and LED lamps from 12%
to 6%.
Excise duty on Mobiles handsets, including cellular phones from 1% without CENVAT credit or 6% with
CENVAT credit to 1% without CENVAT credit or 12.5% with CENVAT credit.
Excise duty on tablet computers is being restructured from 12% to 2% without CENVAT credit or 12.5% with
CENVAT credit.
All goods falling under Chapter sub-heading 2101 20, including iced tea, are being notified under section 4A
of the Central Excise Act for the purpose of assessment of Central Excise duty with reference to the Retail
Sale Price with an abatement of 30%.
Online central excise and service tax registration to be done in two working days.
Excise duty on footwear with leather uppers and having retail price of more than 1000 per pair reduced to
6%.
Excise duty on petrol and diesel to the extent of Rs. 4 per litre shall be converted into road cess to fund
investment,
The Schedule Rates of the Additional Duty of Excise levied on Petrol and High Speed Diesel Oil is being
increased from Rs. 2 per litre to Rs. 8 per litre. The effective rates of the Additional Duty of Excise levied on
Petrol and High Speed Diesel Oil is being increased from Rs. 2 per litre to Rs. 6 per litre only.
Education Cess and Secondary & Higher Education Cess leviable on excisable goods are being subsumed in
Basic Excise duty. Consequently, Education Cess and Secondary & Higher Education Cess leviable on
excisable goods are being fully exempted. Education Cess and Secondary & Higher Education Cess levied on
imported goods as a duty of customs, however, will continue.

Customs Duty:
Some of the key changes in the Customs Duty structure are presented below:

Basic customs duty on specified components for use in the manufacture of specified CNC lathe machines
and machining centres is being reduced from 7.5% to 2.5%, subject to actual user condition.
Basic customs duty on Black Light Unit Module for use in the manufacture of LCD/LED TV panels is being
reduced from 10% to Nil, subject to actual user condition.Basic Customs Duty on Organic LED (OLED) TV
panels is being reduced from 10% to Nil.
The tariff rate of Basic customs duty on Commercial Vehicles is being increased from 10% to 40%. The
effective Basic customs duty on such Vehicles is being increased from 10% to 20%. However, customs duty
on such vehicles in Completely Knocked Down (CKD) condition and electrically operated vehicles including
those in CKD condition will continue to be at 10%.

Increase in basic custom duty :

o Metallurgical coke from 2.5 % to 5%
o Tariff rate on iron and steel and articles increased from 10% to 15% and,
o Tariff rate on commercial vehicle increased from 10% to 40%.
Basic custom duty on certain inputs, raw materials, intermediates and components in 22 items in various
categories like chemicals and petrochemicals, reduced to minimize the impact of duty inversion.
All goods, except populated printed circuit boards for use in manufacture of ITA bound items, exempted
from SAD (Special Additional Duty). SAD reduced on import of certain inputs and raw materials.

ABOUT US
TEAM MDM & CO.:
Manoj D Mahimkar & Co. (MDM & Co.) was established in the year 1995. It is a leading firm of Chartered
Accountants engaged in the field of Accounts, Audits, Taxation, RBI Matters, Legal & Secretarial Services, Project
Financing and other related fields.
Manoj D. Mahimkar & Co. is a professionally managed firm. The team consists of well experienced and motivated
professionals. We not only provide our clients with business solutions under one roof but also regularly and timely
upgrade their knowledge. We believe to stay ahead in the changing economy to provide our clients with the most
consistent and prompt quality services such as business advisory, tax consultancy and other related services.
Team Member
Contact Numbers
Email - id
Manoj Mahimkar, B.com, FCA
9987617536
manoj@mdmco.in
Partner
Bhagwan Pal, M.com, ACA, DISA (ICAI)
9768264189
cabhagwan@gmail.com
Partner
Nikhil Deshpande, Semi- Qualified (CA Final)
9773448112
ca.mdmco@gmail.com
Sr. Audit & Tax Executive
Regd. Office : 305, KAVERI, Opp. Sakinaka Metro Station, Sakinaka Junction, Mumbai 400072
Office Contact numbers : 022-28506728 / 28518902; Email id: support@mdmco.in Website: www.mdmco.in
Disclaimer:
This Budget Synopsis document represents a general overview of tax & economic policy developments and should
not be relied upon without an independent, professional analysis of how any of these provisions may apply to a
specific situation. This publication does not constitute professional advice .The information in this publication has
been obtained or derived from sources believed to be reliable by MDM & Co. but the same does not represent that
this information is accurate or complete. Any opinions or estimates contained in this publication represent the
judgment of MDM & Co. at this time and are subject to change without notice. MDM & Co. neither accepts or
assumes any responsibility or liability to any reader of this publication in respect of the information contained
within it or for any decisions readers may take or decide not to or fail to take.