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Key Takeaways from the FM’s press  release on 23-3-2020

editor: gstgyan.co.in

1. Rs 70,000-crore capital for public sector banks – Upfront capital infusion of Rs 70,000 crore into public sector banks, a move aimed at boosting lending and improving liquidity situation. The move is expected to generate an additional lending and liquidity in the financial system of Rs. 5 lakh crore.

2. Foreign Portfolio Investors – Rollback of enhanced surcharge on foreign portfolio investors levied in the Budget. Surcharge on long and short term capital gains arising from transfer of equity shares has also been withdrawn.

According to data available, FPIs have pulled out Rs around Rs. 23,000 crore from domestic equities in the months of July and August, 2019, as the Budget proposal to levy a surcharge on higher tax-income groups affected 40% of FPIs, operating as trusts or AOPs, and made investment in Indian equities unattractive.

3. Auto sector- BS- IV vehicles purchased before 31st March, 2020 will remain operational for their full period of registration. Further, the decision to hike the one time registration fee on vehicles deferred till June 2020. The ban on purchase of vehicles by government departments lifted and additional 15 per cent depreciation allowed, taking it to 30%, on vehicles acquired from now till March, 2020.

Further, electric vehicles (EVs) and Internal Combustion Vehicles (ICV) both will continue to be registered.
The government’s focus will be on setting up of infrastructure for development of ancillaries/components, including batteries for exports.

Also, the government will soon come up with a scrapping policy for the vehicles.

4. Reduced easy monthly installments for housing, vehicle and other retail loans – Banks have decided to pass on RBI rate cut benefits to borrowers through MCLR reduction. Banks will also launch repo rate and external benchmark-linked loan products that will lead to reduced easy monthly installments for housing, vehicle and other retail loans.

5. No Angel Tax – Angel tax, a major issue among entrepreneurs and in the startup ecosystem, the ‘angel tax’ provision will be withdrawn for startups and their investors. A major relief to entrepreneurs and startups.  The FM also announced several other measures to ease tax liabilities and address the ongoing concerns of tax harassment by tax officials.

6. GST refunds – All pending GST refunds to MSMEs within 30 days. GST refunds of micro, small and medium enterprises (MSMEs) to be paid within 60 days from the date of application. The decision on recommendations of the U K Sinha Committee regarding ease of credit, marketing, technology and delayed payments to MSMEs shall be taken within 30 days. The government shall also consider amendment to the MSME Act to move towards a single definition.

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