The Union Budget 2018 presented on 1st February 2018 by Finance Minister Arun Jaitley was the first Budget post Goods and Services Tax (GST). While there was a lot of speculation on the nature of the Budget, as it was the last full-time Budget presented before General Elections next year, GST had a say in the first major event for the Indian economy in 2018.
Shorter Part B
Prior the implementation of GST, part Bs of Union Budgets were long as they had listings of projected tax revenues under various indirect tax heads such as central excise, customs duty, service tax and VAT along with those of direct tax such as income and corporate tax. However, with GST subsuming most of the indirect taxes, this part was cut short.
There were proposals related to income tax, corporate tax and customs duty along with new schemes, such as National Health Protection Scheme.
No Real Surprises as far as Indirect Taxes Were Concerned
‘Items Becoming Costly, Items Becoming Cheap’ was a common element of most newspapers printed post Budget in the past. This was primarily because the changes made in indirect taxes had a direct impact on the goods used by commoners.
However, since the indirect taxes come under the purview of GST, there were no real surprises in the Union Budget 2018 as far as indirect taxes were concerned. There was little scope for the Finance Minister to tinker with indirect taxes in the Budget, thanks to GST.
No New Sundry Cess
Over the years, the public was worried about sundry cesses being announced in Union Budgets. Remember Krishi Kalyan Cess, Clean Energy Cess, Swachh Bharat Cess, Education Cess and all such sundry cesses. These cesses directly affected the finances of the commoners.
However, thanks to GST absorbing all of them (20) there was no announcement of any sundry cess in the Union Budget 2018, much to the relief of the common man.
Focus on Income and Corporate Tax
With GST taking care of the indirect taxes, the Budget focused on direct taxes including income and corporate tax. No changes were made in the present Income Tax slabs. However, the current education cess of 3% has been replaced with health and education cess of 4%. This will affect the tax payable amount across taxpayers of different categories.
Also, the announcement of the reduction of corporate tax from 30% to 25% for firms with a turnover up to Rs. 250 crores have been applauded. Out of the 4,721 listed companies reporting their turnover for the year ending on March 31, 2017, 963 are set to gain from the move. Among other benefits, this move is expected to leave much needed funds with the corporates to service their business loans which they can avail for upgrades and expansions.
Union Budget 2018 focussed on spending on three key areas – employment, health, and agriculture. With GST collections expected to shore up in the coming days with the implementation of E-way Bill, provisions of spending outlined by the Union Budget 2018 will become more rational.