Circular No. ES/417/2020-21 1 st February, 2021
To: Members of the Council
Sub: Union Budget 2021-22
The Council is pleased to inform you that the Government has announced the Union Budget for 2021-22 on 1st February, 2021 in the paperless form.
Following are the highlights of the Union Budget 2021-22:
ATMA NIRBHAR BHARAT ABHIYAN
Increase in borrowing limits of state governments.
Privatisation of Public Sector Enterprise.
MSMEs and Industry
Collateral free loans for businesses
Fund of funds will be set up for MSMEs
PM Garib Kalyan Yojana
Subordinate debt for MSMEs
Disallowing global tenders of up to Rs. 200 crore
Change in definition of MSMEs
Liquidity support for discoms
Elimination of Regulatory Assets
Commercial coal mining
Reduction in cross subsidy
Production Linked Incentive (PLI) scheme launched to create manufacturing global champions across 13 sectors with amount committed nearly ₹1.97 lakh crore in next 5 years starting FY 2021-22.
Mega Investment Textiles Parks (MITRA) Scheme to create world class infrastructure for global champions in textile sector leading to creation of 7 textile parks over 3 years.
National Infrastructure Pipeline (NIP) Project expanded to 7400 projects.
National Rail Plan
Aims at developing adequate rail infrastructure by 2030 to cater to the projected traffic requirements up to 2050.
The objective is to increase the modal share of rail in freight from the current level of 27 % to 45 %.
100% electrification of Broad Gauge Routes by 2023.
Indigenously developed automatic train protection system to be launched.
139 GW of installed capacity was added during 6 years connecting additional 2.8 crore households with addition of 1.41 lakh circuit km of transmission lines.
Revamped reforms-based result-linked power distribution sector scheme will be launched with an outlay of ₹ 3,05,984 crore over 5 years.
Hydrogen energy mission will be launched.
Ports, Shipping, Waterways
PPP mode to be utilised for managing operational services of major ports.
Subsidy support to promote flagging of merchant ships.
Recycling of Ships Act, 2019 enacted and recycling capacity to be doubled by 2024.
Rationalised single Securities Markets Code by 2022.
World class fintech hub at GIFT IFSC.
Permanent institutional framework for Corporate bond market.
SEBI as regulator and greater role for WDRA for development of commodity market ecosystem.
Investor charter as a right across all financial products.
Amending the Insurance Act,1938 to increase the FDI limit with safeguards.
Asset Reconstruction Company Limited and Asset Management Company to resolve stressed assets problem of PSBs.
National Research Foundation with outlay of ₹50,000 crore over 5 years.
National Language Translation Mission to boost internet access.
Deep Ocean Mission for ocean exploration and biodiversity conservation.
Reduction in the BCD rates on Caprolactam, Nylon chips, Nylon fiber & Nylon yarn to 5%. (Sl. Nos. 37 & 38 of Notification No. 02/2021-Customs dated 1st February, 2021).
Exemption from filing income tax returns for senior citizens (75 years and above) who only have pension and interest income. The paying bank will deduct the necessary tax on their income.
Reducing time limit for reopening of income tax assessment.
Constitution of a Dispute Resolution Committee for small tax payers.
Income Tax Appellate Tribunal to be made faceless
Increase in limit for tax audit for persons who carry out 95% of their transactions digitally
Dividend payment to REIT/InvIT to be exempted from TDS.
Pre filling of returns will also cover capital gains from listed securities, dividend income, etc.
Eligibility for claiming tax holiday for start ups proposed to be extended by one more year
Rationalisation of customs duty structure by eliminating outdated exemptions.
Rationalisation of duties on raw material inputs to man made textiles.
Amendments in CGST, IGST and UTGST Acts, 2017:
Amendments carried out in the Finance Bill, 2021 will come into effect from the date when the same will be notified, as far as possible, concurrently with the corresponding amendments to the similar Acts passed by the States and Union territories with Legislature.
I. AMENDMENTS IN THE CGST ACT, 2017:
A new clause (aa) in sub-section (1) of Section 7 of the CGST Act is being inserted, retrospectively w.e.f. 1st July, 2017, so as to ensure levy of tax on activities or transactions involving supply of goods or services by any person, other than an individual, to its members or constituents or vice-versa, for cash, deferred payment or other valuable consideration.
A new clause (aa) to sub-section (2) of the section 16 of the CGST Act is being inserted to provide that input tax credit on invoice or debit note may be availed only when the details of such invoice or debit note have been furnished by the supplier in the statement of outward supplies and such details have been communicated to the recipient of such invoice or debit note.
Sub-section (5) of section 35 of the CGST Act is being omitted so as to remove the mandatory requirement of getting annual accounts audited and reconciliation statement submitted by specified professional.
Section 44 of the CGST Act is being substituted so as to remove the mandatory requirement of furnishing a reconciliation statement duly audited by specified professional and to provide for filing of the annual return on self-certification basis. It further provides for the Commissioner to exempt a class of taxpayers from the requirement of filing the annual return.
Section 50 of the CGST Act is being amended, retrospectively, to substitute the proviso to sub-section (1) so as to charge interest on net cash liability w.e.f.1st July, 2017.
Section 74 of the CGST Act is being amended so as make seizure and confiscation of goods and conveyances in transit a separate proceeding from recovery of tax.
An explanation to sub-section (12) of section 75 of the CGST Act is being inserted to clarify that “self-assessed tax” shall include the tax payable in respect of outward supplies, the details of which have been furnished under section 37, but not included in the return furnished under section 39.
Section 83 of the CGST Act is being amended so as to provide that provisional attachment shall remain valid for the entire period starting from the initiation of any proceeding under Chapter XII, Chapter XIV or Chapter XV till the expiry of a period of one year from the date of order made thereunder.
Section 129 of the CGST Act is being amended to delink the proceedings under that section relating to detention, seizure and release of goods and conveyances in transit, from the proceedings under section 130 relating to confiscation of goods or conveyances and levy of penalty.
Section 130 of the CGST Act is being amended to delink the proceedings under that section relating to confiscation of goods or conveyances and levy of penalty from the proceedings under section 129 relating to detention, seizure and release of goods and conveyances in transit.
Section 151 of the CGST Act is being substituted to empower the jurisdictional commissioner to call for information from any person relating to any matter dealt with in connection with the Act.
l. Section 152 of the CGST Act is being amended so as to provide that no information obtained under sections 150 and 151 shall be used for the purposes of any proceedings under the Act without giving an opportunity of being heard to the person concerned.
Section 168 of the CGST Act is being amended to enable the jurisdictional commissioner to exercise powers under section 151 to call for information.
n. Consequent to the amendment in section 7 of the CGST Act paragraph 7 of Schedule II to the CGST Act is being omitted retrospectively, with effect from the 1st July, 2017.
II. AMENDMENTS IN THE IGST ACT, 2017:
Section 16 of the IGST Act is being amended so as to:
zero rate the supply of goods or services to a Special Economic Zone developer or a Special Economic Zone unit only when the said supply is for authorised operations;
restrict the zero-rated supply on payment of integrated tax only to a notified class of taxpayers or notified supplies of goods or services; and
link the foreign exchange remittance in case of export of goods with refund.
For more information on the Union Budget 2021-22, please follow the link for the following:
(3) Budget Speech
The complete Union Budget 2021-22 can be viewed by following this link https://www.indiabudget.gov.in/. To download the Union Budget Mobile App, go to the Union Budget Web Portal (www.indiabudget.gov.in)
Members are requested to kindly send us your suggestions / views on the Union Budget provisions latest by 6th February, 2021 (Saturday) to firstname.lastname@example.org, email@example.com and firstname.lastname@example.org so that the same can be included in the Post Budget Memorandum which the Council will be shortly forwarding to the Government.