Author: JSA

If you are not happy with the results, please do another search

JSA Viewpoint – Aviation sector, Budget 2021

Finance Minister Nirmala Sitharaman while presenting the Union Budget for 2021-22 as part of the tax incentives to International Financial Services Centre (IFSC) in GIFT City has proposed tax holiday for capital gains for aircraft leasing companies and tax exemption for aircraft lease rentals paid to foreign lessors.

This move can be considered to be a first step towards creating a domestic aircraft leasing hub in India, since till now, the Indian aviation industry has been dominated by lessors from Ireland, Dubai and Hong Kong due to their attractive tax policies. This move is likely to incentivise leasing companies to set up operations here in the GIFT city and making it a global hub. However, as seen from the past experience from around the world the results may be not be as immediate as expected, Ireland took almost 40 years to be the world’s top aircraft leasing hub. Singapore, too, has invested time and money attracting lessors. Along with providing tax incentives, the government will also need to amend regulations and alter double tax avoidance treaties with other countries to make aircraft leasing business in India a reality. Though tax incentives is a good step towards building this segment in India, the government will need to create a regulatory framework with proper financial structuring so that it could also encourage deep pocketed domestic investment in aircraft leasing business.

JSA Viewpoint by Poonam Verma.

Tags Aviation, Budget2021, JSA Viewpoint, Leasing, Tax, Transport and Logistics

Direct Tax Proposals – Budget, 2021

While the Finance Minister briefly touched upon the direct tax proposals, fine print reveals many proposals that may have far reaching impact. Taxation of gains on ULIPs has been brought at par with Mutual Funds, Interest on PF contributions beyond 2.5 lacs has been made taxable, Slump Sale provisions shall cover other modes of transfer of business as well and anomaly leading to double taxation of income that was subjected to Equalisation Levy in FY 2020-21 has been rectified. Further, Budget proposals that seek to promote reduction in time limit for reopening assessment, increasing turnover threshold for tax audits, and providing pre-filled tax returns are aimed at bringing in certainty and making tax compliances easier. These measures coupled with use of Artificial Intelligence and Analytics shall boost the Direct Tax to GDP ratio in ensuing years.

Quote by Kumarmanglam Vijay published in India Tech Online.

Tags Budget2021, Corporate, Direct Tax, JSA Viewpoint, Services

JSA Viewpoint – Customs duties proposals contained in the Union Budget

Keeping in line with the concept of ‘Aatmnirbhar Bharat’ and ‘Make in India’, the proposals on customs duties in the Union Budget aim at boosting domestic manufacture in various sectors such as renewable energy, electronics, mobile phones, textiles and Agri products.

To this extent, the exemptions currently available under multiple notifications have been rationalised and a revised customs duty structure is proposed to be put in place with effect from 1 October, 2021. While the withdrawal of exemptions may result in increase in the cost of manufacturing in the short-run, the same may be benefit once capacities are created in the domestic market, leading to import-substitutions.

To cater to the need for improving the agricultural infrastructure and funding the same, it is proposed to introduce Agriculture Infrastructure and Development Cess (“AIDC’) on import of select goods. Suitable amendments in the rates of Customs duties have been made to ensure that AIDC does not result in increase in prices for the consumers.

JSA Viewpoint by Manish Mishra.

Tags Budget 2021, Customs, Goods, Indirect Tax, JSA Viewpoint

JSA Viewpoint – GST Changes, Budget 2021

In the backdrop of improving GST collections, the GST proposals contained in the Union Budget presented today, largely focus on easing the compliance burden for the assesses and strengthening the penal provisions in case of defaults.

Doing away with the requirements of submission of Audited financial and reconciliation statements should avoid delays in discharge of annual compliances and bring simplicity. However, this would increase the onus on the assesses to ensure proper disclosures in the Annual Returns, which now need to be filed on self-certification basis.

Among other changes, giving retrospective effect to the provisions for charging of interest on net cash liability provides much-needed clarity and will avoid litigation.

Proposal to limit the option of effecting zero-rated supplies with payment of tax, only to specified class of goods and services or taxpayers could be restrictive and need to be analysed in greater detail, once appropriate notifications are issued in this regard.

JSA Viewpoint by Manish Mishra.

Tags Budget 2021, Goods, GST, Indirect Tax, JSA Viewpoint

Education Sector – Budget 2021

An allocation of 3,002.21 crores to skill development ministry and its various programmes is a welcome step but not sure whether that’s enough given the current pandemic and need to create a digital infrastructure for education.

Higher Education Commission, an Umbrella body to regulate education, is a welcome step and hopefully would provide clarity and ease for educational institutions to introduce multiple academic programs. However, there is a disappointment due to no relief from the burdensome 18% GST on Edtech industry which is doing a massive job of educating our next generation.

Quote by Nitin Potdar published in Business World, Education Times, Skill Outlook, Online and You, Medianews4u, CEO Insights India and Data Quest.

Tags Budget2021, Corporate, Education, Edutech, JSA Viewpoint, Pandemic

FDI in insurance from 49% to 74% – A key change

FDI in insurance from 49% to 74% is a key change, and this will help bring in more investments to scale up business in India. Prior to this change, insurance companies had to be Indian owned and controlled, and with the change foreign ownership and control will now be permitted with safeguards. There is also a proposal to have sufficient number of independent directors, given the sensitivity of the sector. Will help boost the sector particularly given the pandemic and the likely inclination for more insurance cover. FDI in insurance intermediaries has already been permitted upto 100%, so this was an expected next step to provide an effective stimulus for the sector.

Quote by Raj Ramachandran published in The Banking & Finance Post and Fortune India.

Tags Fdi, Finance, Insurance, Key Change

Decriminalisation of offences under the LLP Act – Budget 2021

The proposal for the decriminalisation of offences under the LLP Act as contemplated for the Companies Act, 2013 is an important step, to protect stakeholders from unnecessary litigation, and will provide level playing field to the form of entity, given the broader benefits otherwise available to LLPs. One person company will now be permitted with relaxed conditions, and this will also motivate entrepreneurs to have a corporate structure with limited liability, and will also help start-ups and early-stage ventures.

JSA Viewpoint – Raj Ramachandran.

Tags Budget 2021, Companies Act, Corporate Structure, Decriminalisation, JSA Viewpoint, Limited Liability, Startup

Transformational infrastructure for healthcare – Budget 2021

The government has announced an amount of INR 35,000 crores for the vaccination programme in wake of Covid-19. However, the negotiations between Indian vaccine manufacturers had hinted at a ballpark figure of Rs 60,000-70,000 crores for only the procurement of vaccines during the first phase. Thus, the budgetary outlays falls short of the initial estimates. It is important to note that this estimate also excludes the costs for transformational infrastructure and storage at low temperatures, which have been estimated around $30-80 million.

Quote by Sidharrth Shankar.

Tags Budget 2021, Covid-19, Healthcare, Infrastructure, JSA Viewpoint, Manufacturing, Vaccines

JSA Viewpoint Healthcare – Budget, 2021

For FY 21 GoI had budgeted Rs. 69,000 crore for healthcare, which was 1.6% of GDP. The budgeted amount for FY 22 shows a significant increase. If this growth were to be extrapolated, the GoI should achieve the target of healthcare spend of 2.5 – 3% of GDP (as envisaged in the National Health Policy 2017) well before its target date. This is quite promising and clearly illustrates the importance that the GoI is placing on the sector spurred by the Covid pandemic. What is also very commendable is that the GoI has allocated Rs. 35,000 crore for the Covid vaccine as a separate line item. This shows that the GoI has avoided the pitfall of focussing all its resources on tackling communicable diseases at the cost of building healthcare systems generally because of the Covid pandemic, which notwithstanding its materially adverse impact on the health and economy, is an extraordinary event. The GoI has thus avoided the saliency bias which the Economic Survey had warned against.

Quote by Rohitashwa Prasad published in IIFL Securities, Pharmabiz and Global News Network of India.

Tags Budget 2021, Covid Pandemic, Healthcare, JSA Viewpoint

National Infrastructure Pipeline – Infrastructure Development, Budget 2021

The budget speech expectedly has given a strong signal for infrastructure development focusing on actualizing the ambitious national infrastructure pipeline targeting an investment of Rs.111 lakh crores over 5 years. The signal comes from the announced budgetary allocations and decisions (a) central allocation of Rs5.54 lakh crores, (b) state allocations of Rs.2 lakh crores, (c) announcement to tap into budgetary resources of PSUs and wide-ranging InvITs monetising assets in highways, power transmission, gas pipelines, dedicated freight corridors, airport.

The above announcements are strengthened by announcement of establishing Bad Bank in nature of AMC; a development financial institution with a seed investment of Rs.20,000 crores and a target to be build a lending portfolio of Rs. 5 lakh crores in 3 years; an extensive disinvestment program with target of Rs.1.75 lakh crores; zero coupon bonds that will help arrange the infra financing.

The devil lies in the details and the success in reviving the economy would depend on effective structural reforms in infrastructure sectors removing barriers to growth + how the government goes about monetising the land bank and assets held by PSUs.

Quote by Amit Kapur published in Business World, Deccan Herald, Firstpost, News Free Ads World and Mumbai Live.