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Changes through vote-on-account set to be limited to service tax norms

India
13 Feb 2014

As the government gears up for the general elections scheduled to be held in April-May 2014 in India, a ‘vote-on-account’ would be presented in Parliament for FY15, in lieu of the regular and rather comprehensive annual budget. Taxand India explores the proposed updates.

Finance Minister P Chidambaram will present the interim and final budget of the UPA-2 government to Parliament on 17 February 2014, to seek approval for expenditures proposed, to ensure that sufficient funds are at the disposal of the central government for administrative purposes until the new government is able to present a full budget for FY15. 
 
Chidambaram may be tempted to present his party’s outlook on the reforms agenda if the UPA is voted back to power. He may also take this opportunity to highlight the key achievements of the UPA government during the past decade. 
 
Vote-on-account relates to the expenditure side of the government's budget. Typically, the government put forth an estimate of funds it would require to meet the expenditure that it incurs during the first three to four months of the election financial year. Possibly, the vote-on-account will seek Parliament’s nod for expenditure for the full year, however the incoming government will then update the estimates on presenting its regular budget expected in July 2014. 

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Taxand's Take

The vote-on-account is likely to be in force up to July, 2014 until the full budget is presented and passed in the new Parliament. Multinationals should keep abreast of proposed and formalised legislative changes in this regard.

Taxand's Take Author