The Union Budget 2008 comes in the backdrop of a robust economic growth of 8.7% in 2007-08 with manufacturing and services sector continuing to be the engines of growth. In taxation proposals, while an increase in minimum exemption limits on personal tax is a step in the right direction, there has been no change on corporate tax. Some other important changes in the Income Tax Act are introduction of 5-year tax holiday for non-5 star hotels at World Heritage sites and hospitals across India with the exception of Tier 1 cities, while a sunset date of April 1, 2009 has been stipulated for mineral oil refining operations. On indirect tax, peak rate of customs duty remains unchanged with a welcome reduction in CENVAT from 16% to 14% and CST from 3% to 2%, and reaffirmation of the roadmap to a common GST by April 1, 2010.
PwC: India Budget 2008
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