Union Budget 2020 India: According to Riaz Thingna, Director, Grant Thornton Advisory, while any major shift is not expected in the direct taxes, relief at the lower end of the personal taxes is expected.
Budget 2020-21: While any changes in the indirect taxes under GST will be announced by the GST Council, industry and stakeholders are keen to see if Finance Minister Nirmala Sitharaman will notify some other tax-related measures in Union Budget 2020 today. An announcement on the new Remission of Duties and Taxes on Export Products (RoDTep) Scheme is expected in this budget, According to Vivek Jalan, Co-Chairman of the Taxation Committee, Bengal Chamber Of Commerce. “As India prepares for increasing the export benefits to boost exports, RoDTep is likely to be a new Scheme under Foreign Trade Policy and is expected to be implemented from 1st April 2020,” Vivek Jalan told Financial Express Online. He also said that under GST, certain trade friendly and litigation reducing measures are expected like payment of interest on the GST payable in cash only.
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Another tax analyst expects an extension of income-tax deduction to new export units established in SEZ. “Given that export growth has slowed down, the Government should consider extending profit linked deduction under section 10AA of the IT Act beyond 31 March 2020. This will not only revive the SEZ investment ecosystem but will also result in improving current account deficit situation with more foreign exchange reserves,” Nikhil Rohera, Partner, Corporate & International Tax at PwC India, told Financial Express Online.
Rohera further said that the government had earlier announced that it will launch a scheme to set up mega-manufacturing plants in sunrise and advanced technology areas and investment-linked tax deduction under section 35AD of the IT Act shall be provided. Since no such deduction has been provided yet, it is expected that Budget 2020 should include an amendment to this effect.
Lower personal tax
According to Riaz Thingna, Director, Grant Thornton Advisory, while any major shift is not expected in the direct taxes, relief at the lower end of the personal taxes is expected. Meanwhile, on indirect taxes, the government may tweak the GST law to support the new GST return formats, said Ashish Sharma, Principal, Taxation, Dhruva Advisors LLP. “Although there have been GST rate cuts in the past, there is a reflection of the government’s intent to further rationalize the GST rates. On the customs side, there could be an increase on the import duties in electronics, electricals handicrafts, etc to boost local manufacturers hit by influx of cheap Chinese imports,” Ashish Sharma told Financial Express Online.