Here are hits and misses for the manufacturing sector in Budget 2015-16.
- Finance Minister reiterated that GST will be implemented from April 2016
- Proposed cut in the corporate tax rate to 25 per cent in phased manner over next four years
- Deferment of GAAR by two years to enhance ease of doing business in India
- E-Biz portal where 14 regulatory permits are to be integrated will improve ease of doing business
- Increased outlays in road and rail projects and steps to finance infrastructure projects through setting up of National Investment and Infrastructure Fund and tax-free infrastructure bonds should facilitate overall infrastructure development, which in turn will benefit the manufacturing sector
- Inverted duty structure for select sectors has been addressed keeping in view the 'Make in India' initiative
- Additional investment allowance of 15 per cent for manufacturing undertakings situated in notified backward areas of State of Andhra Pradesh and Telangana
- Increase in additional depreciation rate from 20 per cent to 35 per cent for manufacturing undertakings situated in notified backward areas of State of Andhra Pradesh and Telangana
- Reinstating the withholding tax rate from 25 per cent to 10 per cent on royalty and fees for technical services payments to non-residents to reduce the burden on Indian companies
- Deduction on additional wages paid to new regular workmen not restricted to corporate assessees but all assessees having manufacturing units
- Benefit of deduction on additional wages can be availed at threshold of 50 workmen from 100 workmen earlier
- With a view to facilitate ease of doing business, various measures have been announced such as introduction of digitally signed invoices, increase in time limit for claiming CENVAT Credit from six months to one year from the date of issuance of invoice, etc.
- 1. It was expected that the government would provide a clear roadmap for introduction of GST, which would have reassured the Industry.
- 2. Applicability of MAT to SEZ units
- 3. Restoration of profit-linked incentives on SEZ units
- 4. Rationalisation of MAT rate on companies
- 5. Increase in rate of surcharge from 5 per cent to 7 per cent in case the income exceeds Rs 1 crore but not Rs 10 crore. Increase in rate of surcharge from 10 per cent to 12 per cent for income in excess of Rs 10 crore
- 6. Rationalisation of rate prescribed under safe harbour rules
Bimal Tanna is leader, Industrial Products, PwC India