What are the practical implications of the budget for businesses in India? Rohan Shah and Darshan Bora highlight the key changes
Finance Minister Arun Jaitley presented his third budget on 29 February against the backdrop of global economic turbulence and severe domestic rural distress emanating from two consecutive years of droughts. This year’s budget is oriented towards providing additional resources for rural areas and creating social and physical infrastructure. On the tax and regulatory front, the budget contains a slew of proposals to support the “Make in India” initiative; introduce tax administration-related reforms to facilitate the ease of doing business; rationalize tax incentives; and wind down tax litigation.
This article examines the impact that this budget will have on companies and underlines action points for general counsel.
Although the finance minister did not overtly commit to a timeline for introduction of the goods and services tax (GST) regime, he reaffirmed that the government would continue its efforts to pass the GST constitutional amendment bill. It is expected that the government will reach out to opposition parties to resolve the political deadlock over GST and try to pass the bill during the ongoing budget session of parliament. GST is expected to resolve various issues presently vexing businesses including multiplicity of indirect taxes and the absence of a comprehensive credit mechanism.
Rohan Shah is the managing partner of Economic Laws Practice and Darshan Bora is a senior associate at the firm. The information provided in the article is intended for informational purposes only and does not constitute legal opinion or advice. Readers are requested to seek formal legal advice prior to acting upon any of the information provided.