NEW DELHI: The health 'misery' tax has been withdrawn. Finance minister Pranab Mukherjee on Tuesday decided to drop his budgetary proposal to levy service tax on diagnostic tests and treatment in air-conditioned hospitals.
The tax on healthcare, dubbed by many as a ''misery tax'', had come in for criticism from hospitals as well as Congress members on the grounds that the government was taxing a basic necessity even when it did not provide medical treatment facilities to all the citizens.
On March 1, a day after the Budget, TOI was the first to report that the unpopular proposal would be dropped. The finance ministry was hoping to net Rs 700 crore from this ill-concieved measure.
Replying to the debate on the Finance Bill on Tuesday, Mukherjee admitted: ''The levy on healthcare has raised considerable anxiety in the House and outside...I have decided to exempt the new levy in its entirety both in respect of services provided by hospitals as well as by way of diagnostic tests until GST (goods & services tax) comes into force.''
Along with relief for healthcare, there was marginal relief for automakers as the finance minister halved the import duty on completely-knocked down (CKD) units to 30%. Still, buyers of imported CKD cars should brace for a price increase as the current duty was 10%. The hike will impact high-end models like BMW 3 Series and Audi A4 by around Rs 3-4 lakh.
Imported mobile phones are also set to get cheaper as the countervailing duty that is levied in lieu of local taxes, would be lowered from 5% to 1%. Similarly, imported printers and coking coal are expected to cost less, while duties on some computer parts have also been lowered.
The finance minister, who announced most of the amendments in the absence of the Opposition that had walked out, also provided partial relief to branded readymade garments. Instead of the actual excise levy of 6% proposed in the budget, the minister has levied a tax of 4.5%. He clarified that small scale industry would remain outside the excise net.
The FM also reduced the basic customs duty on raw silk from 30% to 5% to augment domestic availability for weavers, both in the handloom and powerloom segment. There was also relief for 130 items which the government plans to bring under the ambit of central excise with the Mukherjee deciding to make the rules simpler.
In addition, in view of the representations from the industry, the government decided to allow more local companies with overseas subsidiaries to be eligible for payment of lower tax on dividends. In the Budget, the government had proposed to halve the tax rate to 15% on dividends received from foreign subsidiaries in which the Indian company holds over 50% stake. Now, the threshold shareholding is proposed to be lowered to 26%. The move was aimed at getting these overseas subsidiaries to repatriate a larger share of profits to India instead of parking them overseas.
There were also sops for the New Pension Scheme with the minister announcing allowing for deduction to employer's contribution to a pension scheme on account of an employee.
Mukherjee emphasised the importance of staying our course on tax reforms, the enactment of the Direct Tax Code and the constitutional amendment to facilitate the implementation of GST from the next fiscal year.
toi
The tax on healthcare, dubbed by many as a ''misery tax'', had come in for criticism from hospitals as well as Congress members on the grounds that the government was taxing a basic necessity even when it did not provide medical treatment facilities to all the citizens.
On March 1, a day after the Budget, TOI was the first to report that the unpopular proposal would be dropped. The finance ministry was hoping to net Rs 700 crore from this ill-concieved measure.
Replying to the debate on the Finance Bill on Tuesday, Mukherjee admitted: ''The levy on healthcare has raised considerable anxiety in the House and outside...I have decided to exempt the new levy in its entirety both in respect of services provided by hospitals as well as by way of diagnostic tests until GST (goods & services tax) comes into force.''
Along with relief for healthcare, there was marginal relief for automakers as the finance minister halved the import duty on completely-knocked down (CKD) units to 30%. Still, buyers of imported CKD cars should brace for a price increase as the current duty was 10%. The hike will impact high-end models like BMW 3 Series and Audi A4 by around Rs 3-4 lakh.
Imported mobile phones are also set to get cheaper as the countervailing duty that is levied in lieu of local taxes, would be lowered from 5% to 1%. Similarly, imported printers and coking coal are expected to cost less, while duties on some computer parts have also been lowered.
The finance minister, who announced most of the amendments in the absence of the Opposition that had walked out, also provided partial relief to branded readymade garments. Instead of the actual excise levy of 6% proposed in the budget, the minister has levied a tax of 4.5%. He clarified that small scale industry would remain outside the excise net.
The FM also reduced the basic customs duty on raw silk from 30% to 5% to augment domestic availability for weavers, both in the handloom and powerloom segment. There was also relief for 130 items which the government plans to bring under the ambit of central excise with the Mukherjee deciding to make the rules simpler.
In addition, in view of the representations from the industry, the government decided to allow more local companies with overseas subsidiaries to be eligible for payment of lower tax on dividends. In the Budget, the government had proposed to halve the tax rate to 15% on dividends received from foreign subsidiaries in which the Indian company holds over 50% stake. Now, the threshold shareholding is proposed to be lowered to 26%. The move was aimed at getting these overseas subsidiaries to repatriate a larger share of profits to India instead of parking them overseas.
There were also sops for the New Pension Scheme with the minister announcing allowing for deduction to employer's contribution to a pension scheme on account of an employee.
Mukherjee emphasised the importance of staying our course on tax reforms, the enactment of the Direct Tax Code and the constitutional amendment to facilitate the implementation of GST from the next fiscal year.
toi
No comments:
Post a Comment