Union Budget 2018 to be India's first post implementation of GST

With excise duty and service tax being subsumed in the GST, the classifications in the forthcoming budget may undergo change.

Union Budget 2018 to be India's first post implementation of GST

New Delhi: Finance Minister Arun Jaitley is all set to present the current NDA government's fifth and arguably his toughest Budget yet. This will also be India's first post-GST and will be keenly watched to see what the FM does to boost growth in Asia's third largest economy.

Jaitley will seek to address agriculture distress, create jobs and boost growth while at the same time stick to fiscal prudence.

The Union Budget 2018-19 would be the last full Budget of the BJP-led NDA government before the 2019 general elections.

Small businesses, which have traditionally formed the core support base of the BJP, too may get some sops to ease pain caused to them due to chaotic rollout of the Goods and Services Tax (GST) and demonetisation.

Jaitley has to manoeuvre all this within limited scope of tinkering with tax rates given that central excise duty, which was levied on goods manufactured in the country, and service tax have both been subsumed in the GST and he no longer has the sole power to fix rates on them.

Even though independent India's biggest tax reform of GST was implemented from July 1, the Budget for 2017-18 (April- March), had followed the practice of tax revenue projections under the heads of customs duty, central excise and service tax alongside direct tax numbers.

With excise duty and service tax being subsumed in the GST, the classifications in the forthcoming budget may undergo change.

While a new classification for revenues to be accrued from GST will be included in the Budget for the next fiscal, for the current year two sets of accounting may be presented one for actual accruals during April-June for excise, customs and service tax, and the other for July-March period for GST and customs duty.

There is also an expectation that common man may get some relief in income tax by way of a raise in the exemption limit.

Also on Jaitley's menu may be upping spending on infrastructure projects like highways and modernisation of railways to boost economic growth that is at a four-year low.
 
Prime Minister Narendra Modi seemed to have already lowered expectations of mass voter swaying announcements when he indicated that the Budget may not be resort to populism and that it was a myth that common man wants sop.

Scrapping the colonial-era tradition of presenting the Budget at the end of February, Jaitley had for the first time presented the annual accounts on February 1 last year.

The Budget presentation was advanced by a month to ensure that proposals take effect from April 1, the beginning of the new financial year.

Also, the nearly century old tradition of having a separate budget for the railways was scrapped and merged with the general budget.

With PTI Inputs

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