INDIA Law and Practice Contributed by: Raj Ramachandran, Kartik Jain, Mannat Nirola and Anmol Mahajan, JSA Advocates & Solicitors
liquor for human consumption remain outside the GST framework and continue to be subject to separate indirect tax regimes. 2. Customs duty Customs duty is levied on import of goods into India. Certain key components of the customs duty payable are: • Basic Customs Duty (BCD); • Integrated Goods and Services Tax (IGST); • Social Welfare Surcharge (SWS) levied at 10% on the aggregate of duties, taxes and cesses levied under the Customs Act, 1962; • Agriculture Infrastructure and Development Cess (AIDC) levied on import of specified products, for the purposes of financing agriculture infrastructure and other development expenditure; • health cess, which is levied on import of specified medical instruments to boost the domestic manu - facturers of such products; and • anti-dumping duties and safeguard duties, which are levied on import of specified goods/import from specified countries, in addition to the other duties/ taxes/cesses that may be leviable. The provisions under the Customs Act and rules and regulations framed thereunder cover the procedures, documentation, formalities and operations relating to international trade transactions, with the aim of sim - plifying, harmonising and standardising such transac - tions. The Foreign Trade Policy (FTP) provides various export promotion schemes such as the Export Pro - motion Capital Goods scheme, the Export Oriented Units scheme, the Advance Authorisation scheme, and the scheme for remission of duties and taxes on exported products. 3. Excise duty With the advent of GST, excise duty has been sub - sumed within GST for most goods. However, excise duty continues to survive on a limited category of goods kept outside the ambit of GST, namely petro - leum crude, high-speed diesel, motor spirit (petrol), natural gas, aviation turbine fuel, alcoholic liquor for human consumption (state excise laws) and tobacco/
tobacco products, on which excise duty continues to be levied in addition to GST. 5.3 Available Tax Credits/Incentives Direct Tax The available incentives are a mix of income-based tax holidays, investment-based deductions and sec - tor-specific benefits. The table below summarises the most common key incentives, on fulfilment of certain prescribed requirements: Incentive: Start-up tax holiday Who can benefit : Eligible start-ups (companies or LLPs) Benefit :100% deduction on profits for three consecu - tive years in a ten-year block Incentive: GIFT City (IFSC) tax holiday Who can benefit : Units in the International Financial Services Centre Benefit :100% tax holiday for 20 years within a 25-year block Incentive: Data centre services tax holiday Who can benefit : Foreign companies using Indian data centres Benefit : Income tax exemption until 31 March 2047 Incentive: Patent box regime Who can benefit : Eligible taxpayers earning royalty income from patents developed and registered in India Benefit : Preferential taxation of qualifying patent roy - alty income Incentive: Scientific research Who can benefit : Businesses incurring qualifying sci - entific research expenditure Benefit : Deduction for qualifying revenue and certain capital expenditure on scientific research Incentive: In-house R&D facility Who can benefit : Companies with approved in-house R&D facilities
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