Budget 2018 Blog Series

This is the fourth post in the our new blog series on the Budget 2018. Following our earlier posts (here, herehere and here) on the impact of the Budget on the Direct, Indirect Tax regimes and the Healthcare sector, this piece focuses on the amendments to the advance ruling system under the Customs Act. We hope you enjoy reading this as much as we have enjoyed putting this together.


The Finance Act, 2017 consolidated the Authority for Advance Rulings (AAR) for customs law and direct taxes, to promote the ease of doing business in India. In continuation to that, as well as the introduction of the Goods and Service Tax (GST), the Union Budget 2018 (Budget) proposes various amendments to the Customs Act, 1962 (Customs Act). Such amendments not only include enhancement in the scope of the advance ruling system in India, but also entail revamping of its procedural aspects.

Scope of AAR

The regulatory environment is proposed to be made more conducive by enlarging the ambit of the eligible persons entitled to make an application for advance ruling. Presently, only a joint venture in India, a non-resident person setting up a joint venture in collaboration with a non-resident/ resident, a wholly owned subsidiary of a foreign company, or certain other notified persons (i.e. PSU’s, resident companies and firms, residents importing from Singapore) can apply for an advance ruling.

The amendments proposed in the Budget would allow any person holding a valid Importer-Exporter Code, exporting any goods to India, or having a justifiable cause to the satisfaction of the AAR, to make an application for advance ruling. The said proposal grants wide discretionary powers to the proposed AAR to be constituted under the Customs Act (Customs AAR) to entertain any applicant having a justifiable cause to its satisfaction. This potentially extends the said facility to all persons, including foreign individuals, looking to independently set up business in India or export to India. Additionally, in line with the intent of ensuring the ease of doing of business in India, the proposals include amendments to allow foreign persons intending to export goods to India to be represented by an authorised Indian resident for advance ruling purposes. Interestingly, it is also proposed that the ambit of Customs law be expanded to include persons out of India. This would facilitate the effective regulation of import-export transactions undertaken by foreign suppliers.Continue Reading Authority for Advance Rulings under Customs Law: A Metamorphosis

This is the third post in the our new blog series on the Budget 2018. Following our earlier posts (here, here and here) on the impact of the Budget on the Direct and Indirect Tax regimes, this piece focuses on the initiatives proposed under this Budget in the Healthcare sector. We hope you enjoy reading this as much as we have enjoyed putting this together.


A healthcare focused Budget. Universal healthcare on the anvil.

“India cannot realise its demographic dividend without its citizens being healthy”…. Mr. Arun Jaitley, Hon’ble Finance Minister of India in his budget speech of February 1, 2018.

One of the key constituents of the Union Budget for the year 2018-2019 is healthcare. With the Budget envisaging a boost to the healthcare insurance, service provider and pharmaceutical sector, share prices of some key pharmaceutical companies showed a spike during the speech.

The Hon’ble Finance Minister announced two new initiatives under the “Ayushman Bharat Programme“:Continue Reading First Impressions of the Budget 2018 – Healthcare, Pharmaceuticals and Life Sciences

This is the second post in the our new blog series on the Budget 2018. Following our two-part post (here and here) on the impact of the Budget on the Direct Tax regime, this piece focuses on the amendments proposed under this Budget in the Indirect Tax space. We hope you enjoy reading this as much as we have enjoyed putting this together.


With the Indian economy recovering from a transitional slump post the implementation of the Goods and Services Tax (GST) of July 01, 2017, the Union Budget 2018 (Budget), tabled in the Lok Sabha on February 01, 2018, reinforces the commitment of Central Government to its “Make in India” and “Digital India” initiatives.

Though the Budget does not propose any significant changes in GST legislation, it recommends changes on the customs front, with a clear intent to vitalise the domestic manufacturing sector, while maintaining investor interest. The key amendments proposed to customs law are detailed below:

  • Customs

Tariff – For the first time in over a decade and a half, the government has increased customs duty rates ostensibly with a view to boost domestic manufacturing in terms of the “Make in India” initiative. The sectors impacted are electronics, automobile, medical devices, packaged food, cosmetics, textile, etc. The duty hike on mobile phones, smart watches, perfumes, fruit juices, television parts such as printed circuit boards and cabinets, cosmetics, silk fabrics, etc. is expected to create a push for suppliers to manufacture or source components in these sectors, locally.Continue Reading First Impressions of the Budget 2018 – Indirect Tax

Published here is Part II, the concluding section, of our blog piece on the key amendments proposed under Budget 2018 to the Income Tax Act. You can view Part I here. We hope you enjoy reading this as much as we have enjoyed putting this together.


  • Amendments in Relation to Income Computation Disclosure Standards (ICDS): Recently, the Delhi High Court had held that some provisions of the ICDS are unconstitutional for want of legislative backing and their variance from applicable judicial precedents. In order to provide a requisite legislative framework for ICDS, the Budget now proposes to make various amendments in the provisions of the IT Act, pertaining to the deduction of marked to market losses computed in accordance with ICDS, for treating the gains or losses, computed in accordance with ICDS, as income or loss and to provide for a method of valuations in cases of inventory, goods, services and securities, etc.
  • Facilitating Measures for Companies under Insolvency Proceedings:
    • Relief from MAT: The Budget proposes to provide MAT relief for companies whose application for a corporate insolvency resolution process under the Insolvency and Bankruptcy Code, 2016 (IBC) has been admitted by the Adjudicating Authority. Accordingly, the aggregate amount of unabsorbed depreciation and loss brought forward shall be allowed to be reduced from the book profit to determine MAT.
    • Benefit of carry forward and set off of losses: The provisions of section 79 of the IT Act relating to carry forward and set off losses would not apply to companies whose resolution plan has been approved under the IBC.

Continue Reading First Impressions of the Budget 2018: Income Tax Act – Part II

This is the first post in the our new blog series on the Budget 2018. This is a two-part piece on the amendments proposed under this Budget to the Income Tax Act; published here is Part I. We hope you enjoy reading this as much as we have enjoyed putting this together.


On 1st February, 2018, the Finance Minister Mr. Arun Jaitley presented the last full-year Union Budget before the 2019 Lok Sabha elections. It was delivered against a backdrop of economic slowdown caused by demonetisation in November, 2016 and the implementation of Goods and Services Tax (GST) legislations. The Budget focuses on strengthening agriculture and the rural economy, providing social security benefits and infrastructure creation.

The Finance Minister stated that the Indian economy is reviving and predicted that its Gross Domestic Product will rise to 7-7.5% in 2018-19, and that India is expected to become one of the world’s fastest and largest economies.

In the paragraphs below, we present a snapshot of some of the proposed amendments to the Income Tax Act, 1961 (IT Act) presented in this Budget:Continue Reading First Impressions of the Budget 2018: Income Tax Act – Part I