This budget strikes an excellent balance between growth and increased focus on capital expenditure while keeping the goal of fiscal consolidation on track.
Indirect tax plays a pivotal role and contributes for more than half of the government’s tax revenue. Hence, the government tabled an indirect tax budget with a view to further strengthen existing tax compliance processes and ease out taxpayer’s burden. With this intention and to build an opportune environment for Indian Inc, the finance minister introduced gamut of proposals for Customs and GST reforms.
Continuing with theme to encourage domestic value addition and make in India, further changes in Customs duty both upward and downward have been carried out in this budget working towards ‘Atmanirbhar Bharat’ by bringing in the measures promoting domestic value addition as well as encouraging use of green energy. Key proposals under GST include non-availability of ITC of CSR expenses, widening scope of OIDAR services, decriminalization of certain offences and streamlining of returns, among others.
Hon’ble FM, in her budget speech, also acknowledged need for expansive technology solutions and spearhead artificial intelligence to realise PM’s vision of ‘Ease of Doing Business’ in harmony with the idea of continued stability in indirect taxes. With the foresight of increasing GST revenues and enhancing the confidence of taxpayers in the GST system, this budget also concentrated on “Make AI in India”, “Make AI work for India” and “Digital India” initiatives, being centre of the digital revolution.
While Indirect tax proposals made in this year’s budget showcase that Government has surely heard and tended to industry expectations in ease of doing business, however, few expectations of India Inc. still remain unaddressed. Announcement of additional GST reforms and reliefs, such GST return revision facility, inclusion of petroleum products under GST, GST rates rationalization, etc. were some of the major demands of the taxpayers. The long-awaited creation of the GST Appellate Tribunal, which acts as the second stage of appeal in the GST court, was also expected to be announced in today’s Budget. While Union budget did not provide any clear directions, on any of these issues, however, continuing with the theme of ‘Atmanirbhar Bharat’, one would hope for further announcements during course of the year.
With GOI’s anticipation for the nation to come out with flying colors soon, the visionary budget proposal has attempted to implement contemporary reforms and policies under GST law to fulfil the long-cherished dream of Prime Minister christened as ‘One Nation- One Tax- One Market’. This year’s Indirect tax proposals seems to be in line with few of the industry expectations, however there are still issues that need expeditious resolution for clear sailing of businesses in the country. It would be interesting to see how the proposed plan may be used as artillery to exponentially increase the Indian GDP and how untouched concerns would be looked upon in future. All in all, Budget 2023 appears to be an extremely well-balanced budget with a pragmatic approach to provide required impetus to growth trajectory of India Inc.
This article was originally published in Financial Express.