India: 2012-13 Budget
India’s 2012 Budget was announced by the Finance Minister on March 16. Among the highlights of amendments which will be effective April 1:
- No change to corporate tax rates
- No real advance on last year’s GST proposals
- Hike in Service Tax from 10% to 12%
- Significant changes to international tax and cross border transactions which will, in sum, make it more difficult for nonresidents to do business in India.
- Controversial retrospective amendments which would overrule several existing judgments. (Note: these are in proposal stage as of 3/19.)
- The introduction of general anti-avoidance rules (GAAR) provisions
- Measures to prevent generation and circulation of unaccounted money
- Several Transfer Pricing-related amendments, including the introduction of Advance Pricing Arrangements, clarifications regarding applicability of the Arm’s Length Principle, and extension of certain filing deadlines.
- New incentive regimes
- Proposed 10% tax on income of company directors