Union Budget 2019 at a glance

EXPORTS BOOSTERTaxbreak on Capital Spending in Mega PlantsA tax-break on capital spending in mega manufacturing plants is meant to raise the share of manufacturing as a proportion of GDP and help boost exports. The incentive will be an investment-linked deduction in sunrise and advanced technology areas. Investors will be enthused only when enabling infrastructure like 24/7 power supply is in place for the tax break to work and spur investment.CUSTOMS POWERCrackdown to Curb Misuse of ConcessionsA crackdown against bogus entities that indulge in unfair practices to get export concessions will curb misuse. Also, misuse of duty free-scrips and drawback facility involving more than Rs 50 lakh will be a cognizable and non-bailable offence. Customs officers will have powers to arrest a person who commits an offence outside India or Indian Customs waters, to make certain offences as cognizable and nonbailable and provisionally attach bank accounts.PRO-RESOLUTIONSweetener for Buyers of Cos at Bankruptcy CourtGood news for prospective buyers of companies that the government has taken to the bankruptcy court. These companies will not be denied carry forward of business loss when there is a change in shareholding as well as the board of directors. In the normal course, a company loses the benefit of carry forward losses when more than 50% of the shareholders change. Distressed companies will also get a breather on minimum alternate tax. It will help turnaround of companies.GST REFORMSMore Teeth to Anti-profiteering AuthorityChanges in the Central Goods and Services Tax to ease compliance for traders. This includes empowering the National Anti-profiteering Authority to impose penalty equivalent to 10% of the profiteered amount. This will compel industry to pass on tax cuts to consumers who will gain from lower retail prices. A National Appellate Authority for Advance Ruling will help resolve disputes at an early stage.DISTRESS SALE SOPSDeemed Gift Tax Waiver for Distress Asset BuyersAn exemption from deemed gift tax will be given to buyers of some categories of distressed companies that will be notified by the government. The levy treats investment in companies at a price below its fair market value as a deemed gift and taxes the difference at 30% in the hands of the buyer.RECAST-FRIENDLY‘Demerger’ Definition SimplifiedThe definition of ‘demerger’ has been simplified to allow the resulting company to record the value of the property and liabilities at a value different from the book value in compliance with the Indian Accounting Standards. This will make restructuring easier and do away with tax uncertainty.

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