Key announcements by FM Nirmala Sitharaman on Indian economy, FPIs, GST and Automobile

New Delhi: FM Nirmala Sitharaman on Friday announced withdrawal of enhanced surcharge on Foreign Portfolio Investments (FPIs), that was revealed during presentation of Union Budget 2019.

Addressing a press conference along with top finance ministry officials at National Media Centre in New Delhi, Sitharaman made a slew of announcements regarding the state of economy FPIs, GST , NBFCs and Automobile sector.

Here are the key highlights of her announcements

- Government withdraws enhanced surcharge on FPIs, pre-budget position is restored.

- In order to encourage investment in capital market, FM decided to withdraw enhance surcharge levied by the Finance No. 2 Act 2019. In simple words, the enhance surcharge on FPI goes, surcharge on domestic investors in equity goes. Pre-budget position is restored.

- CSR violations will not be treated as a criminal offence and instead be as civil liabilities. On or after 1st October 2019 all the Income-tax orders, notices, summons, letters, etc shall be issued through a centralised computer system.

- FM Nirmala Sitharaman announced measures for banks & MSMEs, says releasing Rs 70,000 cr of capital upfront for bank capitalisation.

- GST filing will be simplified further to meet the GSTN to remove further glitches in the system. All pending GST refunds due to MSMEs till now shall be paid within 30 days from today. In future, the GST refunds to MSMEs will be paid within 60 days.

- There will be faceless scrutiny from 'Vijay Dashmi' this year, which will mean that there shall not be even, that one odd over-enthusiastic officer who might go and sit & talk about things, which may be construed as harassment.

- Increase in NHB funding from Rs 20,000 crore to Rs 30,000 crore. NBFCs will be now be permitted to use Aadhar based KYC of bank for their customers.

- Withdrawal of Sec 56(2)(viib) of IT Act Dedicated cell at CBDT for addressing challenges of startups; Sec 56(2) (vii)(b) to not apply to DPIIT registered startups.

- Income Tax orders, notices, summons, letters, etc to be sent only through centralized system. It will have a computer generated unique ID Number.

- NBFC’s can now use Aadhaar authenticated bank KYC to avoid the repeated process.

- BS4 vehicles purchased before 31.3.20 will remain operational till validity of the car's registration.

- Higher vehicle registration fee deferred till June 2020.

- Additional 15 percent depreciation on all vehicles to be allowed for all vehicles bought from now till March 31 2020, taking the total depreciation to 30 percent.

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Written By: Zee Media Bureau | Edited By: Reema Sharma | Updated: Aug 23, 2019, 18:54 PM IST

  

GST on under-construction housing properties cut to 5%, affordable houses to 1%

Finance Minister Arun Jaitley, Finance Ministers of Delhi, Bihar and Himachal Pradesh at the 33rd GST Council meeting on 24 Feb 2019 (PTI)

 New Delhi: Union and state governments on Sunday decided to lower Goods and Services Tax (GST) on under construction housing properties to 5% from an effective 12% in a pro-consumer decision ahead of national polls due by April-May.

GST rate on affordable housing projects too has been lowered from an effective 8% to 1%. Under-construction properties priced upto Rs. 45 lakh will qualify as affordable housing projects for the purpose of GST relief in both metro cities as well as non-metro cities, finance minister Arun Jaitley told reporters.

"We wanted to give a boost to the real estate sector as well as give relief to the middle class, neo-middle class and the aspirational middle class class. This will come into effect 1 April 2019," said Jaitley.

Although the cap on price of the property is ₹45 lakh for both metro and non-metro projects to get the 1% tax rate, they have to meet different carpet area requirements. Only those with the carpet area of 60 square metre in metros and 90 square metre in non-metros falling under the Rs. 45 lakh cap will be eligible for the 1% rate, explained Jaitley.

Credit - gettyimages

In both the cases, builders will not be able to adjust the taxes paid on raw materials like cement and steel against the final tax liability on under-construction properties. This was not the case earlier. The composition scheme announced for properties, like those applicable to restaurants and traders, consists of a small flat tax rate without input tax credits.

A videoconference of the Council's meeting held last Wednesday was adjourned as several states suggested a face to face meeting on Sunday was needed to discuss the issue thoroughly.

Sunday's decision was broadly based on recommendations of a ministerial panel led by Gujarat deputy chief minister Nitin Patel which favoured lowering the GST rate on under-construction properties.

The idea is to boost the real estate sector which is struggling with record inventories. At present, the effective rate of GST on under-construction properties is 12% after allowing for the cost of land, which is out of the purview of GST. Properties where the construction has been completed attract stamp duty, not GST.

The GST Council has been slashing tax rates to give relief to consumers despite the impact it has on the exchequer. Revenue secretary Ajay Bhushan Pandey said in an interview in Mint earlier this month that because of the rate reductions, benefit amounting to almost Rs. 90,000 crore a year has been given to consumers.

Builder lobbies, including the Confederation of Real Estate Developers’ Association of India (Credai) and the National Real Estate Development Council have been demanding a reduction in the GST rate for a while now.

This story originally postade by - https://www.livemint.com