DELHI BUDGET 2013-14: HIGHLIGHTS

Chief Minister Sheila Dikshit on 20^th March 2013 presented budget for 2013-14 with a spate of schemes for various sections and infrastructure development and no fresh taxes.

The main highlights of budget are:

Sales Tax

·         A new facility of online registration under the Delhi Value Added Tax Act and 

the Central Sales Tax Act has been proposed.

·     A uniform tax period for all the dealers irrespective of their turnover, i.e. quarterly. Hence all the dealer has to file four return instead of 12.

·      Additionally, the dealers won’t be required to submit hard copies of the entire VAT Returns; instead they will file only the copy of acknowledgement of the Return downloaded by them.

·         Threshold limit for Registration under VAT from Rs. 10 lakh to Rs. 20 lakh.

·   To encourage dealers to voluntarily admit their tax liability, It is propose that, subject to depositing the tax due, penalties upto 80% of admitted tax would be automatically mitigated, even in cases where field inspections are carried out.

·     Work contract dealers are required to maintain quite elaborate records for purpose of VAT compliance. Under a new composition scheme w.e.f April 1, 2013, dealers would be allowed to pay a tax based on their overall turnover

·         VAT Reduced:

Ø  On Eco- Friendly LED lights from 12.5% to 5%.

Ø  On Desi Ghee from 12.5% to 5%.

·       ·       Vat Waived For:

Ø  chilly spray used for woman's self defence,

Ø  pencil/ geometry boxes and on charki and manza used for flying kites 

Ø  Organic colours, Singhada (water-chestnut),kuttu and their atta, sendha namak 

Ø  Footwear priced up to Rs.500 exempted from VAT.

Ø  Refused Derived Fuel.

Ø  Tiles and kerbstones which are made from malba.

Note:- Tiles and kerbstones not made from malba will continue to be taxed  at 12.5%.

Economic Scenario

·     Gross State Domestic Product (GSDP) of Delhi is on track to grow at 9% compared to 5% for the country. The contribution of Delhi in the national GDP is 3.8% though we are only 1.4% of the total population.

·      The Per Capita Income of Delhi now stands at Rs. 2,01,083 in 2012-13. It has gone up 5 times since this Govt. took up. In 1998-99, when the per capita income was Rs. 40,060

Financial Position
·      Our Tax-GSDP ratio is expected to increase to 6.88% in 2012-13 which was 6.43% in 2011-12.

Debt Position
·    The outstanding debt of Delhi is 7.89% of GSDP in 2012-13, which is the lowest among all the states in the country. Our loan has come down from Rs.30,140 crore in March, 2011 to Rs. 28,888 crore by March, 2013.

Fiscal Deficit
·      Fiscal Deficit has been projected to reduce to Rs. 1268 cr. in 2013-14 from Rs. 2921 in 2012-13.

Expenditure
·      The total proposed expenditure for the year 2013-14 is Rs. 37,450 crore. It includes Rs. 21,000 crore non-plan expenditure, Rs. 16,000 crore plan expenditure and Rs. 450 crore under centrally sponsored schemes.

·     Total proposed expenditure  has been financed by Rs. 30,454 crore from tax revenue, Rs. 913 crore from non-tax revenue, capital receipts of Rs. 4113 crore, grant-in-aid of Rs. 2701 crore from Central Government. We will be left with a surplus of Rs. 731 crore.

·       Out of the total proposed plan outlay of Rs. 16,000 crore 65% is reserved for social services sectors proposed i.e Rs. 10,359 crore.

Major Programm for Social Security And Welfare
·        A scheme “Dilli Annshree Yojana” has been launched. 31,617 beneficiaries of this scheme have been covered till mid-March under this Direct Benefit Transfer Aadhar-linked bank account scheme. Cash @ Rs. 600 per month has already been transferred to these beneficiaries with effect from April, 2012. Govt. has decided to extend the period up to 31/07/2013, so that all who are enrolled by then would get the benefit from April 2012.

·        A new scheme, the Dilli Swavalamban Yojana (DSY) has been launched as a co-contributory pension scheme for those in unorganized sector. In this scheme the state and Central Govt. will contribute Rs. 1,000 each per annum along with a contribution not exceeding Rs. 12,000 from the subscriber.

·     Govt. propose to enhance the annual grant from Rs.1 crore to Rs. 2 crore during the year 2013-14 to Delhi Haj Committee for facilitating the Haj pilgrimage.

·         Rs.5 crore funds is set aside for the welfare of journalists of Delhi. 

·    One-time grant of Rs.100, 000 to RWAs which offer to provide house essential equipment and open the facility to public at no profit no loss basis. 

·         Rs.150 crore to improve level of civic services in industrial estates. 

·       Financial support of Rs.1, 000 per month for transgender living in Delhi for at least 3 years.

·   Monthly aid of Rs.1, 500 for senior citizens, differently-abled person and women in distress. 

Health
·      Rs. 2,490 crore in 2013-14 has been allocated to Health Sector as compared to Rs. 1,872 crore in 2012-13 i.e an increase of 33%.

·   100 new ambulances to be procured for Centralized Accident & Trauma Services (CATS). 

·      It has been propose to raise the income criteria of beneficiaries under Delhi Arogya Kosh from Rs. 2 lakh p.a to Rs. 3 lakh p.a from 1/04/2013.

·      The construction work of 7 new hospitals and 9 new dispensaries during 2013-14 is proposed.

Education
·         Rs. 1,901 crore in 2013-14 has been allocated to Education Sector.

·     The award amount increased for teachers under Indira Gandhi and State Award schemes to Rs. 25,000, and for the best students from Rs. 2,100 to Rs. 5,000.

·         Five new Rajakiya Pratibha Vikas Vidyalaya (RPVV) and one RPVV exclusive for science. Thirty-four new school buildings to be completed in 2013-14. 

·         An MOU is signed with Singapore for setting up Skill Development Centre to come up at Jaunapur by the year 2015. 

·       Meanwhile a Skill Development Centre at ITI Vivek Vihar Complex w.e.f. July, 2013 will start. About 640 youth will be admitted in different courses of one year duration for two sectors of Hospitality and Retail Merchandising.

·         Guru Gobind Singh Indraprastha University will start a new course for B. Com. (Hons.) from 2013-14. Delhi College of Engineering has been upgraded to Delhi Technological University.

·         Residential school for scheduled castes/Scheduled Tribes/other backward class/minorities students. 

Housing and Urban Development
·         Two new projects for construction of 8420 EWS houses at a cost of Rs. 465 cr at Tikri Kalan and for construction of 240 EWS houses at a cost of Rs. 22 cr has been approved under JNNURM.

·         Ownership rights to the original allottees of all 45 JJ Resettlement colonies.

Water Supply
·         A new water treatment plant of 31 MGD at Palla.

Transport
·         Delhi Metro Phase-III, scheduled to be completed in 2016 and will add 103 km to the existing network.

·         Procurement of 625 low floor and 1100 semi-low floor buses for DTC.

·         8000 new auto rickshaws for corporate houses on the lines of radio taxis.

Enegry
·         It is proposed to increase the transformation capacity to 16,000 MVA by the end of the year.

Regards

CA. Mona Singhal

Partner

Arpit Gupta & Associates

Chartered Accountants

701, Nirmal Tower,

26, Barakhamba Road,

Connaught Place, Delhi-110001

Mobile:- +91-9873082769 

Website: www.caaga.co.in

TAX HIGHTLIGHTS OF BUDGET 2013-2014

DIRECT TAXES

·   A tax credit of Rs. 2000 to every person with total income up to Rs.5 lakhs will be provided.

·  Surcharge of 10 % on persons (other than companies) whose taxable income exceeds Rs. 1 crore.

·  Increase surcharge from 5% to 10 % on domestic companies whose taxable income exceed Rs.10 crore.

·  In case of foreign companies if the taxable income exceeds Rs.10 crore then surcharge increase from 2% to 5 %,. 

·   In all other cases such as dividend distribution tax or tax on distributed income, current surcharge increased from 5% to 10 %.

·   Additional surcharges to be in force for only one year.

·   Education cess to continue at 3 %.

·  Permissible premium rate increased from 10 % to 15 % of the sum assured by relaxing eligibility conditions of life insurance policies for persons suffering from disability and certain ailments.

·   Contributions made to schemes of Central and State Governments similar to Central Government Health Scheme, eligible for section 80D of the Income tax Act.

·   Donations made to National Children Fund eligible for 100% deduction u/s 80G.

·  Investment allowance at the rate of 15% to manufacturing companies that invest more than Rs.100 crore in plant and machinery during the period 1.4.2013 to 31.3.2015.

·   Eligible date’ for projects in the power sector to avail benefit under Section 80- IA extended from 31.3.2013 to 31.3.2014.

·  Concessional rate of tax of 15% on dividend received by an Indian company from its foreign subsidiary proposed to continue for one more year.

·   Securitization Trust to be exempted from Income Tax. Tax to be levied at specified rates only at the time of distribution of income for companies, individual or HUF etc. No further tax on income received by investors from the Trust.

·    Investor Protection Fund of depositories exempt from Income-tax in some cases.

·    Parity in taxation between IDF-Mutual Fund and IDF-NBFC.

·    A Category-I AIF set up as Venture capital fund allowed pass through status under Income-tax Act.

·   TDS at the rate of 1% on the value of the transfer of immovable properties where consideration exceeds Rs.50 lakhs. Agricultural land to be exempted.

·  A final withholding tax at the rate of 20% on profits distributed by unlisted companies to shareholders through buyback of shares.

·    Reductions made in rates of Securities Transaction Tax in respect of certain transaction.

·    Modified provisions of GAAR will come into effect from 1.4.2016.

·  Rules on Safe Harbour will be issued after examing the reports of the Rangachary Committee appointed to look into tax matters relating to Development Centers & IT Sector and Safe Harbour rules for a number of sectors.

·   A number of administrative measures such as extension of refund banker system to refund more than Rs.50,000, technology based processing, extension of e-payment through more banks and expansion in the scope of annual information returns by Income-tax Department.

·   Income limit for RGESS raised to 12 lakh from Rs 10 lakh.

·   Fifth large tax payer unit to open at Kolkata shortly.

·   Proposal to introduce Commodity Transaction Tax (CTT) in a limited way. Agricultural commodities will be exempted.

·   Proposal to increase the rate of tax on payments by way of royalty and fees for technical services to non-residents from 10% to 25%.

INDIRECT TAXES

Customs

·   No change in the peak rate of basic customs duty of 10% for non-agricultural products.

·  Period of concession available for specified part of electric and hybrid vehicles extended up to 31 March 2015.

·  Duty on specified machinery for manufacture of leather and leather goods including footwear reduced from 7.5% to 5%.

·   Duty on pre-forms precious and semi-precious stones reduced from 10 to 2%.

·   Export duty on de-oiled rice bran oil cake withdrawn.

·   Duty of 10% on export of unprocessed ilmenite and 5% on export of ungraded ilmenite.

·   Concessions to air craft maintenance, repair and overhaul (MRO) industry.

·   Duty on Set Top Boxes increased from 5% to10%.

·   Duty on raw silk increased from 5% to 15%.

·   Duties on Steam Coal and Bituminous Coal equalized and 2% custom duty and 2% CVD levied on both kinds of coal.

·   Duty on imported luxury goods such as high end motor vehicles, motor cycles, yachts and similar vessels increased.

·   Duty free gold limit increased to Rs.50,000 in case of male passenger and Rs.1,00,000 in case of a female passenger subject to conditions.

EXCISE DUTY

·   There is no change in excise duty.

·  Relief to readymade garment industry. In case of cotton, zero excise duty at fiber stage also. In case of spun yarn made of manmade fiber, duty of 12% at the fiber stage.

·   Handmade carpets and textile floor coverings of coir and jute totally exempted from excise duty.

·   To provide relief to ship building industry, ships and vessels exempted from excise duty. No CVD on imported ships and vessels.

·  Specific excise duty on cigarettes increased by about 18 %. Similar increase on cigars, cheroots and cigarillos.

·    Excise duty on SUVs increased from 27% to 30%. Not applicable for SUVs registered as taxies.

·    Excise duty on marble increased from Rs.30 per square meter to Rs. 60 per square meter.

·    Proposals to levy 4% excise duty on silver manufactured from smelting zinc or lead.

·    Duty on mobile phones priced at more than Rs. 2000 raised to 6 %.

·  MRP based assessment in respect of branded medicaments of Ayurveda, Unani, Siddha, Homeopathy and bio-chemic systems of medicine to reduce valuation disputes.

SERVICE TAX

·    There is no change in service tax rate.

·    2 items are added in negative list:-

      i.   Vocational courses offered by institutes affiliated to the State Council of Vocational Training

      ii.   Testing activities in relation to agricultural produce

·   Exemption of Service Tax on copyright on cinematography limited to films exhibited in cinema halls.

·   For homes and flats with a carpet area of 2,000 sq.ft. or more or of a value of Rs.1 crore or more, which are high-end constructions, where the component of services is greater, rate of abatement reduced from 75 to 70 %.

·  A onetime scheme called ‘Voluntary Compliance Encouragement Scheme’ proposed to be introduced. Defaulter may avail of the scheme on condition that he files truthful declaration of Service Tax dues since 1st October 2007.

·    Tax proposals on Direct Taxes side estimated to yield to Rs.13, 300 crore and on the Indirect Tax side Rs.4, 700 crore.

·    Proposals to levy Service Tax on all air conditioned restaurant.

GOODS AND SERVICE TAX

·   For GST need to be pass by Constitutional Amendment. To present Draft Bill on GST in parliament in next few months.

Regards

CA. Mona Singhal

Partner

Arpit Gupta & Associates

Chartered Accountants

701, Nirmal Tower,

26, Barakhamba Road,

Connaught Place, 

Delhi-110001

Mobile No. +91-9873082769

Website: www.caaga.co.in