Budget 2013: An exercise that's steeped in realism
CMD, India Infrastructure Fin Co
The need to keep the industrial sector on a higher trajectory and to invest in infrastructure to push up economic rejuvenation appears to have been addressed albeit partially.
The retail sector would benefit from the budget proposals with the option of excise duty exemption being restored for branded readymade garments and basic customs duty on de-hulled oat grains being reduced from 30% to 15%.
Other announcements which would benefit the manufacturing sector include reduction in customs duty from 7.5% to 5% for leather & footwear industry; extension of customs duty concession on specified parts of electric and hybrid vehicles up to March 31, 2015, and customs duty reduction on pre-forms of gemstones from 10% to 2%.
While other budgetary proposals are favouring the infrastructure segment, there is little news on this front as far as indirect taxes are concerned.
Customs duty concessions have been announced for the MRO industry. Further, to provide relief to ship building industry, ships and vessels have been exempted from excise duty; accordingly, there would be no CVD on imported ships and vessels.
An innovative move to increase indirect tax collections is the announcement of one-time voluntary compliance encouragement scheme (VCS) for service tax defaulters by permitting them to regularise their service tax compliance from 2007 onwards upon payment of full tax dues but without levy of interest or penalties.
On implementation of GST, the finance minister appealed to state governments to extend their co-operation in formulation of overall consensus to allow tabling of the draft Bills on Constitutional amendment and GST legislation before the Parliament.
The industry, especially manufacturing and infrastructure sectors, wished that the indirect tax proposals would have done more to create a more robust path for higher and accelerated industrial development.