30 April 2010

Amendments to Finance Bill,2010 [1 Attachment]

[Attachment(s) from Ashwin Nagar included below]

FM's Oopening Speech at Consideration Stage of Finance Bill,2010- see attachment
Finance Bill ,2010 passed in Lok Sabha On 29.04.2010.Few New Tax relief has been proposed during the discussion and same has been incorporated in the Bill while passing by the Lok Sabha. Amendments are given below.


Sl. No.

Clause No.
Page 5, line 46, Omit 'and";'

Page, after line 46, insert –
'(ab) on or after the 1st day of April, 2010, where the specified business is in the nature of building and operating a new hospital with at least one hundred beds of patients;
(ac) on or after the 1st day of April, 2010, where the specified business is in the nature of developing and building a housing . project under a scheme for slum redevelopment or rehabilitation framed by the Central Government or a State Government, as the case may be, and which is notified by the Board in this behalf in accordance with guidelines as may be prescribed; and";
Page 5, line 48,—
for "and clause (aa)"
substitute "clause (aa), clause (ab) and clause (ac)'"

Page 5, after line 52, insert
'(v) building and operating, anywhere in India, a new hospital with at least one hundred beds for patients;
(vi) developing and building a housing project under a scheme for slum redevelopment or rehabilitation framed by the Central Government or a State Government, as the case may be, and notified by the Board in this behalf in accordance with the guidelines as may be prescribed;'.

Page 6, line 47,—
after "to a limited liability partnership"
insert "or any transfer of a share or shares held in the company by a shareholder".

Page 7, for lines 24 and 25, substitute
"asset or share or shares not charged under section 45 by virtue of conditions laid down in the said proviso shall be deemed to be the profits and gains chargeable to tax of the successor limited liability partnership or the shareholder of the predecessor company, as the case may be, for".

Page 7, after Iine 30, insert
'(aa) after sub-section (2A A), the following sub-section shall be inserted with effect from the 1st day of April, 2011, namely:—
"(2AAA) Where the capital asset being rights of a partner referred to in section 42 of the Limited Liability PartnershipAct, 2008 (6 of 2009) became the property of the assessee on conversion as referred to in clause (xiiib) of section 47, the cost of acquisition of the asset shall be deemed to be the cost of acquisition to him of the share or shares in the company immediately before its conversion.";'
Page 14, after line 7, insert
Amendment of the Second Schedule.
'62A. In the Second Schedule to the Customs Tariff Act, against heading No. 16, in column (3), for the entry "Rs. 2500 per tonne", the entry "Rs. 10000 per tone" shall be substituted.'.
62A (New)
Page 17, after line 49, insert
'(3A) for clause (77c), the following clause shall be substituted, namely:—
'(77c) "passenger" means any person boarding an aircraft in India for performing domestic journey or international journey.';'.
Page 39, line 9, in column (3),
after "on inputs"
insert "or input services".
The Eighth Schedule

Pranab hands out tax concessions to India Inc

Opposition unhappy, says nothing for the common man.

Our Bureau

New Delhi, Apr 29

The Finance Minister, Mr Pranab Mukherjee, today made a number of amendments to the Finance Bill including raising the export duty on iron ore lumps and increasing the standard rate on raw cotton exports.

Simultaneously, he reduced the import duty on melting scrap for stainless steel, and the service tax burden on construction services and air travel. Mr Mukherjee also offered a debt relief package for coffee growers.

The main Opposition party, Bhartiya Janata Party (BJP), walked out saying that there was no relief for the common man and farmers. The Left parties too staged a walkout. The Finance Bill was later passed by the Lok Sabha.

As part of the reply to the discussions on the Finance Bill, 2010, the Finance Minister announced a debt relief package to the small growers of coffee. He also provided relief to medium and large growers by allowing re-scheduling of loans. The total financial implication for the Centre would be Rs 241.33 crore, while the benefit to coffee growers will be about Rs 362.82 crore.

Tax Deduction

On the income-tax front, Mr Mukherjee announced that new hospitals with at least 100 beds and constructed anywhere in India would now be entitled for investment-linked deduction.

Also, housing projects developed for slum redevelopment and rehabilitation under Rajiv Awas Yojana (RAY) will be eligible for investment-linked deduction for income-tax purposes.

Another relief for the housing sector came by way of reduced service tax burden on construction services.

"Several suggestions have been made by trade associations. Considering all inputs, I propose to provide tax relief to this sector by enhancing the rate of abatement from 67 per cent to 75 per cent of the gross value where such value includes value of land constructed upon," Mr Mukherjee said.

However, the real-estate industry felt that the measures for housing were a mixed bag. "Although the service tax outgo will now be calculated on 25 per cent and not 33 per cent of the value of the house, it still falls short of expectations. The industry was hoping that land value will be completely excluded from such calculation, which has not happened. Also, the abatement is lower than what the industry had sought (90 per cent)," said Mr Pratik Jain, Executive Director of KPMG.

Real-estate company Parsvnath Developers Chairman, Mr Pradeep Jain, said the Government's move to exempt service tax on constructions under JNNURM and RAY was a welcome step.

Meanwhile, on the aviation sector, the Finance Minister clarified that Rs 100 will be the maximum service tax a domestic air traveller will pay for each journey, while travel to and from the North-East will be totally exempt. Mr Mukherjee added that Rs 500 will be the maximum that an economy class international air traveller will have to pay as service tax.

The Finance Minister also announced an increase in the export duty on iron ore lumps from 10 per cent to 15 per cent. This move was hailed by the steel-makers, stating that this has been a long-standing demand of the steel industry.

"This is certainly a positive move for the steel industry as domestic availability of iron ore will increase which will help steel makers," said Mr Sushil Maroo, Director, Jindal Steel and Power Ltd.

Limited Liability Partnership

On limited liability partnership (LLP), the Finance Minister announced that transfer of shares by the shareholders of the company would be tax exempt. This move was in consequence of the decision to allow tax neutrality for conversion of a company into LLP.

"The one important and very positive change is the exemption from levy of capital gains tax in the hands of shareholders upon the conversion of a company into a limited liability partnership. Arguably, such a conversion is a tax neutral event as it is, but the clarification is a step in the right direction.

"One had hoped that the conditions which permit only small companies to convert tax neutral would have been removed," Mr Dinesh Kanabar, Deputy CEO and Chairman Tax, KPMG in India told Business Line.

Drugs cheaper

The Finance Minister also announced reduction in basic customs duty on 11 specified drugs including two anti-cancer and one for the treatment of AIDS to 5 per cent.

These drugs are also being exempted from countervailing duty by way of excise duty exemption.

Meanwhile, Fortis Healthcare Ltd welcomed the measures announced for the health care industry. "It will contribute to the creation of much needed infrastructure in the country. This is symbolic of the Government's efforts to provide the support required by the sector," the company said in a statement.


Attachment(s) 1 of 1 File(s)

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