The Institute of Chartered Accountants of India Nagpur Branch has organized program “Immediate Reaction on Union Budget-2020”, wherein expert Chartered Accountants from the city expressed their reactions and shared their reading between the lines on the said budget.
ON DIRECT TAXES PROPOSALS:-
While expressing his views on the direct taxes proposals, CA. Abhay Agrawalstarted straight with the apple pie of media narrating about the changes in personal taxation rates. Whereas the tax payers would now have the option to claim between new tax rate structures of 5%, 10%, 15%, 20%, 25% and 30% without claiming any deductions (like LTC, HRA, Standard Deduction, Interest on Housing Loan u/s 24, 35AD, any deduction under Chapter VIA) versus the existing tax rates of 5%, 20% and 30%, the tax calculations would galore. The issue needs more prominence as it would be a challenge for Employers as to deduct TDS on salaries on what basis.
Abhay lauded Government steps for giving a real push up to start ups in the tax provisions. With Central Government’s Agenda of Housing for all, extending the date for approval under affordable housing scheme from 31.03.20 to 31.03.21 was a welcome step. CA Agrawal emphasized that tax provision of Section 50C as regards difference between Value of Sale Deed and actual stamp duty valuation being raised from 5% to 10% was the need of the hour though not sufficient. Abolition of Dividend Distribution Tax is considered to be a welcome step but the implications of taxing the individuals for dividend received by them would increase the tax compliance burden. The Compliance provisions for Charitable Institutions as regards details to be input to Income Tax Department regarding Donations received from Donors would be a tedious provision.
CA Abhay Agrawal specifically drew attention towards introduction of Section 271AAD which speaks about Penalty for Fake Invoice which culminates into false entry. The limit for tax audit has been increased from Rs 1 crore to Rs, 5 crores for those assesseeswhich are more digital and accepting less than 5% cash from their customers. The “Tax Payer Chapter” mentioned by Hon’ble Finance Minister would be a welcome step.
CA Abhay Agrawal informed about “Vivaad se Vishwas Scheme” covered by Hon’ble Finance Minister in her speech wherein there would be complete waiver from interest and penalty if disputed tax amount is paid upto 31.03.2020. The rules are yet to be notified in this regard, he said. About Government initiative for E-Appeals i.e. faceless appeals, CA Agrawal commented that how it would be implemented would be challenging. CA Abhay Agrawal concluded that changes in tax structure are many and its real impact can be understood only after thorough reading of the provisions.
ON INDIRECT TAXES PROPOSALS:-
CA. Varun Vijaywargi, expressing on the Indirect Taxes said that generally recommendations and decisions of GST Council are ratified in the Budget by Government. GST is the most talked about topic by everyone. He said that a health cess of 5% has been proposed on import of medical equipments. Customs duty has been increased on few products imported in final shape to our country as it is whereas it has been reduced on import of raw materials to our country. The reasons for these custom charges and cess has been to promote “Make in India” concept which is fast gaining prominence. CA Vijaywargi informed about the New Foreign Trade Policy coming in place from 01.04.2020.
ON CAPITAL MARKET& ECONOMY:-
While expressing his view on Impact on Capital Market CA.SamirBakresaid that this Budget was very important and relevant as there was a consistent decline in Economy and GDP since last 6 quarters. There were a lot of expectations from the Budget; however the real analysis of problem area was not done. The real problem of staggering Indian Economy is today “Demand” and not “Capacity Utilization” on which the Government seems to be working more. The real magnitude of problem is a tremendous slowdown in economy wherein even the direct tax collections have taken a dip for the first time in last 20 years.
The real problem lies in taking measures for improving credit offtake as well as employment generation. The various sectors of industry including auto sector, real estate sector, banking sector were expecting more positive steps from the Government. The Government is doing its bit and its expenditure on Infrastructure and other sectors is increasing but this is not matched with the revenue receipts due to the economic slowdown. Our economy grows by our consumption pattern; however the current trends speaks of “Postponement of demands”. CA Samir Bakre welcomed the government’s initiative to increase restructuring time limit for MSME’s to 31.03.2021 as well as increasing Deposit Insurance scheme from Rs 1 lac to Rs. 5 lacs. The huge fall in equity markets speaks of the market sentiments and the huge expectations from the budget not being met completely though in short run.
ON TRADE & INDUSTRY:-
Talking on Trade & Industry perspective CA. HemantLodhaemphasized that though Government understand the slowdown but probably not able to come out with a perfect solution due to various associated factors. He welcomed the steps for boosting agriultural economy with new concepts of “Kisan Credit card”, “KisanUdan” etc as well as Agricultural warehousing where the PPP concept has been proposed. “Every District will have an Export Hub” is a welcome statement by Honorable Finance Minister Madam. Removal of DDT is a welcome step for the Industry per se.
The incentives to start up would boost the economy. He however pointed out that there is a working capital blockage due to monthly payment of GST. He appreciated the National Textile mission and reforms proposed in infrastructure and power sector. However the issue of creation of job opportunities was found missing, he said. Though the core areas were addressed still looking at bigger picture few opportunities have been missed out said CA HemantLodha.
CA. Abhijit Kelkar, RCM commented that CA’s play a crucial role in implementation of budget proposals. The expectations from the professionals as regards interpretation of law and the compliances thereof is apparent. He complimented the Nagpur Branch for organizing this immediate reaction on Union Budget.
Earlier Chairman CA. Suren Duragkar, welcomed the participants in his welcome address and said that Nagpur is the only Branch across the country to organize an immediate reaction on Budget on the day of budget itself.
It has been an overall very good budget which will definitely boost economy in positive direction. After having interaction from the past six months with various financial sector leaders, the Honorable Finance Minister NirmalaSitaraman has given proper allocation and justice to all the Sectors. 70 deduction/exemptions out of 100 have been removed from income tax is a move towards simplification.
The Hon’ble Finance Minister has given proper attention to various sectors like Agriculture, Education, Skill Development, Employment, Simplification of Laws, etc.
Views on Budget were also expressed by Past President of ICAI, CA. Jaydeep Shah.
CA. Anil Parakh Past Chairman Nagpur Branch efficiently coordinated the programme and added valuable comments on the Budget and said that to understand the budget and to know its implications on the business of clients, one needs to interpret and analyze the law. “The moment Hon’ble Finance Minister finishes the Budget speech, Clients expect from Chartered Accountants to opine”. However one needs to study the entire Finance Bill in minute details to understand the changes brought about in law. More of Governance and less of Government is the intention of Union Budget 2020, opined CA Anil Parakh
CA. Saket Bagdia, Secretary of Nagpur Branch coordinated the proceedings and presented formal vote of thanks.
Prominently present on the occasion were CA. Kirit Kalyani- Vice Chairman, CA. Jiten Saglani – Treasurer,CA. Sanjay M. Agrawal, CA. Akshay Gulhane, CA. Harish Rangwani, CA. O.S. Bagdia, CA. SatishSarda, CA. Umang Agrawal, CA KavitaLoya, CA. P.C. Sardaand large numbers of members.