On Tuesday, 1 February 2022, the Hon'ble Finance Minister, Nirmala Sitharaman, presented Union Budget 2022 in the Lok Sabha.
We bring you a detailed analysis on tax and regulatory amendments announced by the Hon'ble Finance Minister at her budget speech in respect of defence sector.
Key highlights for defence sector
- Reiterating its commitment to promote indigenisation, government has budgeted 68% of capital procurement from domestic industry in 2022-23, up from 58% in 2021-22
- Budgeted expenditure for capital outlay in defence increased by approx. 12.82%
- Reservation for R&D and setup of nodal umbrella body for testing and certification are other measures to increase the self-reliance in the sector
- To promote domestic industry and reduce reliance on imports, sunset date of 31 March 2023 has been prescribed for existing exemption available on specific imports in relation to defence and internal security forces