The Finance Minister presented the Finance (No. 2) Bill, 2024 (the Bill) to Parliament on 23 July 2024. The Bill proposes changes to the customs duty rates of various goods and amendments to simplify and rationalize goods and services tax (GST) regulations.
Customs Duties
The Bill proposes to amend the customs duty rate structure for a number of goods. Some of the key rate changes are as follows:
- exemptions for (i) specific cancer medicines; (ii) critical minerals used in sectors such as nuclear/renewable energy, space, defence, telecommunications, etc.; (iii) capital goods for use in the manufacture of solar cells/panels; and
- a reduction of the basic customs duty (BCD) on mobile phones and chargers to 15%; specific seafoods to 5%; and gold and silver to 6%.
Goods and Services Tax (GST)
The Bill proposes to provide that:
- no refund of unutilized input tax credit or integrated tax will be allowed in cases of zero-rated supplies of goods, where such goods are subjected to export duty;
- the apportionment of a co-insurance premium by the lead insurer to the co-insurer for insurance services jointly supplied to the insured in co-insurance agreements will be treated as neither a supply of goods nor a supply of services, provided that the lead insurer pays the tax liability on the entire amount of premium paid by the insured; and
- no GST will be levied on extra neutral alcohol (ENA) used in the manufacturing of alcoholic liquor for human consumption.
The Bill also proposes to amend other administrative and compliance provisions under the GST.
The full text of the Finance Bill is available here, and the memorandum explaining the provisions in the Bill is available here.
Source: IBFD Tax Research Platform News