Highlights of FM’s Booster Package for Economy

Union Finance Minister Nirmala Sitharaman made big announcements to boost the economy. While addressing the press, the Finance Minister said that there are clear signs of controlling inflation and revival of industrial production.

Here are the key announcements for different sectors :

For Financial Markets :

  • Enhanced surcharge levied on LTCG and STCG withdrawn
  • Section 56-2B of I-T tax will not applicable to a registered startups
  • A dedicated cell will be set up at CBDT to address the tax problems of startups
  • Startups can approach the cell for quick resolution of any tax issue.
  • Rs 70,000 crore to be released upfront to PSBs for additional credit facilities
  • Govt to take steps for launch of credit default swap funds
  • Depository receipt scheme 2014 to be operationalised by Sebi
  • Will work with the RBI to make bond market conducive to investors
  • Fin Min-RBI working to bring offshore rupee market to domestic market
  • Establish credit enhancement for infrastructure and housing projects
  • Liquidity support to HFCs increased to Rs 30,000 crore

To Boost Consumption :

  • NBFCs can use aadhar-enabled KYC for onboarding customers
  • More credit support to purchase of vehicles, houses, consumer goods
  • NBFCs are receiving credit from banks and they have started fresh lending to customer
  • PSB-NBFC synergy to be facilitated to reach last-mile customers
  • NHBs to give Rs 20,000 extra liquidity to HFCs

MSME’s and GST Issues :

  • All pending GST refunds to MSMEs will be sorted out within 30 days
  • All future GST refund issues will be sorted out within 60 days
  • Pending GST refunds to be paid in 30 days
  • Banks to issue One-time settlement plans for MSMEs
  • Future GST refund matters will be sorted in 60 days

Measures for Auto Sector :

  • BS-IV vehicles purchased up to March 31, 2020, will all remain operational for their entire period of registration
  • Revision of one-time registration fee deferred till June 2020
  • Additional 15% depreciation to be allowed on any vehicles acquired from now till March 2020, raising it to 30% in total
  • Both EVs and ICVs will continued to be registered
  • To boost demand for cars, govt to lift ban on purchase of new vehicles by govt department to replace old vehicles
  • Govt to consider measures, including a scrappage policy, to boost demand

Banking :

  • Another Rs 5 lakh crore will be released in a phased manner
  • Banks decided to pass on any MCLR rate cut in full
  • Banks to launch repo-linked loan products
  • Banks to issue improved, transparent processes for one-time loan settlements
  • Banks to launch check book approach for one-time loan settlement of MSMEs
  • Working capital loans for industry going to be cheaper
  • Aversion to risk taking at banks to be addressed
  • IBCs at banks to classify cases for vigilance and non-vigilance to ensure no harassment of bankers making honest decisions

Measures on Taxation Front :

  • Faceless tax scrutiny from Vijay Dashami
  • Pre-filing of income-tax to become a reality soon
  • Reduction of GST returns and simplified forms soon and refund process is getting automatic
  • Random tax assessment will happen only in certain cases
  • Physical tax assessment will happen only in random cases
  • Risk-based approach is taken in dealing with tax payers
  • Over 1,400 cases for corporate offences withdrawn
  • Govt does want to pursue anything in terms of prosecution
  • CSR violations will not be treated as criminal offence, instead they will be treated as civil violations civil matter
  • Issue of I-T orders, notices, summons etc now shall go through a centralised system from Oct 1, 2019
  • Issue of all I-T orders, notices, summons etc now shall go through a centralised system from Oct 1, 2019
  • Any notice that does not go through the central system will not be legal
  • All old I-T notices to be cleared by Oct 1, 2019, and if required will be reissued through the central system
  • No officer will be acting on them independently
  • No tax officer will be acting on them independently
  • No assesses will have do anything with a notice after s/he had replied

Measures to Boost Export :

  • Extend the scheme of Reimbursement of Taxes & Duties for Export promotion
  • Fully automated electronic refund route for Input Tax Credits (ITC) in GST
  • Expanding scope of Export Credit Insurance Scheme (ECIS) by ECGC
  • Revised Priority Sector Lending (PSL) norms for Export Credit
  • Effective monitoring of Export Financing by Department of Commerce
  • Leverage technology to reduce “Time to Export or Turn-around time”
  • Annual mega shopping festivals
  • Special FTA Utilisation Mission
  • Online “Origin Management System”
  • Time bound adoption of mandatory Technical Standards
  • Affordable testing and certification infrastructure
  • Enable handicrafts industry to effectively harness e-commerce for exports