Budget's impact on Nifty 50 companies: EY analysis

MAT carry forward upped to 15 yrs, extension of 5% withholding tax among the Budget's announcements

With Minimum Alternate Tax (MAT) carry forward being upped to 15 years, extension of a concessional five per cent withholding tax for the next three years and other provisions being announced in Budget 2017-18, EY analyses how the Nifty 50 companies have been impacted.

Here is a company-wise analysis of the Budget's impact:

1) Adani Ports and Special Economic Zone Ltd

• Concessional withholding tax rate of 5 per cent on interest on ECBs and RDBs extended upto June 2020.

• Rationalisation of MAT provisions in line with Ind-AS 

• MAT credit to be carried forward up to 15 years 

• Immovable property will now be long term where held for 2 years as against 3 years

• Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise

2) Axis Bank Ltd

• Concessional withholding tax rate of 5 per cent on interest on ECBs and RDBs extended upto June 2020.

• Increase in rate for deduction in respect of provision for bad and doubtful debts from 7.5 per cent to 8.5 per cent of the total income

• MAT credit to be carried forward up to 15 years 

• Rationalisation of MAT provisions in line with Ind-AS 

• Immovable property will now be long term where held for 2 years as against 3 years

• Custom and Excise duty exemption on specified goods for digital payment 

3) Bank of Baroda

• Concessional withholding tax rate of 5 per cent on interest on ECBs and RDBs extended upto June 2020.

• Increase in rate for deduction in respect of provision for bad and doubtful debts from 7.5 per cent to 8.5 per cent of the total income

• MAT credit to be carried forward up to 15 years 

• Rationalisation of MAT provisions in line with Ind-AS 

• Immovable property will now be long term where held for 2 years as against 3 years

• Custom and Excise duty exemption on specified goods for digital payment 

4) HCL Technologies Ltd

• MAT credit to be carried forward up to 15 years

• Rationalisation of MAT provisions in line with Ind-AS

• Concessional withholding tax rate of 5 per cent on interest on ECBs and RDBs extended upto June 2020.

• Withholding tax rate reduced to 2 per cent from 10 per cent on call centre receipts

• MAT paid to the extent of FTC claimed cannot be carried forward

• Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise

• Deduction under section 10AA restricted to total income

5) HDFC Bank Ltd

• Concessional withholding tax rate of 5 per cent on interest on ECBs and RDBs extended upto June 2020

• Increase in rate for deduction in respect of provision for bad and doubtful debts from 7.5 per cent to 8.5 per cent of the total income

• MAT credit to be carried forward up to 15 years

• Rationalisation of MAT provisions in line with Ind-AS 

• Immovable property will now be long term where held for 2 years as against 3 years

• Custom and Excise duty exemption on specified goods for digital payment 

6) Housing Development Finance Corporation Ltd

• Concessional withholding tax rate of 5 per cent on interest on ECBs and RDBs extended upto June 2020

• Increase in rate for deduction in respect of provision for bad and doubtful debts from 7.5 per cent to 8.5 per cent of the total income

• MAT credit to be carried forward up to 15 years

• Rationalisation of MAT provisions in line with Ind-AS 

• Immovable property will now be long term where held for 2 years as against 3 years

7) ICICI Bank Ltd

• Concessional withholding tax rate of 5 per cent on interest on ECBs and RDBs extended upto June 2020.

• Increase in rate for deduction in respect of provision for bad and doubtful debts from 7.5 per cent to 8.5 per cent of the total income

• MAT credit to be carried forward up to 15 years

• Rationalisation of MAT provisions in line with Ind-AS 

• Immovable property will now be long term where held for 2 years as against 3 years

• Custom and Excise duty exemption on specified goods for digital payment 

8) IndusInd Bank Ltd

• Concessional withholding tax rate of 5 per cent on interest on ECBs and RDBs extended upto June 2020

• Increase in rate for deduction in respect of provision for bad and doubtful debts from 7.5 per cent to 8.5 per cent of the total income

• MAT credit to be carried forward up to 15 years

• Rationalisation of MAT provisions in line with Ind-AS 

• Immovable property will now be long term where held for 2 years as against 3 years

• Custom and Excise duty exemption on specified goods for digital payment

9) Infosys Ltd

• MAT credit to be carried forward up to 15 years

• Rationalisation of MAT provisions in line with Ind-AS 

• Concessional withholding tax rate of 5 per cent on interest on ECBs and RDBs extended upto June 2020

• Withholding tax rate reduced to 2 per cent from 10 per cent on call centre receipts

• MAT paid to the extent of FTC claimed cannot be carried forward

• Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise

• Deduction under section 10AA restricted to total income

10) Kotak Mahindra Bank Ltd

• Concessional withholding tax rate of 5 per cent on interest on ECBs and RDBs extended upto June 2020

• Increase in rate for deduction in respect of provision for bad and doubtful debts from 7.5 per cent to 8.5 per cent of the total income

• MAT credit to be carried forward up to 15 years

• Rationalisation of MAT provisions in line with Ind-AS 

• Immovable property will now be long term where held for 2 years as against 3 years

• Custom and Excise duty exemption on specified goods for digital payment 

11) State Bank of India

• Concessional withholding tax rate of 5 per cent on interest on ECBs and RDBs extended upto June 2020

• Increase in rate for deduction in respect of provision for bad and doubtful debts from 7.5 per cent to 8.5 per cent of the total income

• MAT credit to be carried forward up to 15 years

• Rationalisation of MAT provisions in line with Ind-AS 

• Immovable property will now be long term where held for 2 years as against 3 years

• Custom and Excise duty exemption on specified goods for digital payment 

12) Tata Consultancy Services Ltd

• MAT credit to be carried forward up to 15 years

• Rationalisation of MAT provisions in line with Ind-AS 

• Concessional withholding tax rate of 5 per cent on interest on ECBs and RDBs extended upto June 2020

• Withholding tax rate reduced to 2 per cent from 10 per cent on call centre receipts. 

• MAT paid to the extent of FTC claimed cannot be carried forward.

• Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise.

• Deduction under section 10AA restricted to total income. 

13) Tech Mahindra Ltd

• MAT credit to be carried forward up to 15 years

• Rationalisation of MAT provisions in line with Ind-AS 

• Concessional withholding tax rate of 5 per cent on interest on ECBs and RDBs extended upto June 2020

• Withholding tax rate reduced to 2 per cent from 10 per cent on call centre receipts. 

• MAT paid to the extent of FTC claimed cannot be carried forward.

• Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise.

• Deduction under section 10AA restricted to total income. 

14) Wipro Ltd

• MAT credit to be carried forward up to 15 years

• Rationalisation of MAT provisions in line with Ind-AS 

• Concessional withholding tax rate of 5 per cent on interest on ECBs and RDBs extended upto June 2020

• Withholding tax rate reduced to 2 per cent from 10 per cent on call centre receipts. 

• MAT paid to the extent of FTC claimed cannot be carried forward.

• Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise.

• Deduction under section 10AA restricted to total income. 

15) Yes Bank Ltd

• Concessional withholding tax rate of 5 per cent on interest on ECBs and RDBs extended upto June 2020

• Increase in rate for deduction in respect of provision for bad and doubtful debts from 7.5 per cent to 8.5 per cent of the total income

• MAT credit to be carried forward up to 15 years

• Rationalisation of MAT provisions in line with Ind-AS 

• Immovable property will now be long term where held for 2 years as against 3 years

• Custom and Excise duty exemption on specified goods for digital payment 

16) Zee Entertainment Enterprises Ltd

• MAT credit to be carried forward up to 15 years

• Rationalisation of MAT provisions in line with Ind-AS 

17) ACC Ltd

• Concessional tax rate of 10 per cent introduced on income by way of transfer of carbon credits

• Concessional withholding tax rate of 5 per cent on interest on ECBs extended upto June 2020.

• MAT credit to be carried forward up to 15 years

• Rationalisation of MAT provisions in line with Ind-AS 

18) Ambuja Cements Ltd

• Concessional tax rate of 10 per cent introduced on income by way of transfer of carbon credits

• Concessional withholding tax rate of 5 per cent on interest on ECBs extended upto June 2020.

• MAT credit to be carried forward up to 15 years

• Rationalisation of MAT provisions in line with Ind-AS 

19) Bharat Petroleum Corporation Ltd

• Concessional tax rate of 10 per cent introduced on income by way of transfer of carbon credits

• Concessional withholding tax rate of 5 per cent on interest on ECBs extended upto June 2020.

20) GAIL (India) Ltd

• Concessional tax rate of 10 per cent introduced on income by way of transfer of carbon credits

• Concessional withholding tax rate of 5 per cent on interest on ECBs extended upto June 2020.

• Reduction in customs and excise duty rates of certain specified machineries/ parts/ material for power generation  

21) Grasim Industries Ltd

• Concessional tax rate of 10 per cent introduced on income by way of transfer of carbon credits

• Concessional withholding tax rate of 5 per cent on interest on ECBs extended upto June 2020

22) Larsen & Toubro Ltd
 

• Concessional tax rate of 10 per cent introduced on income by way of transfer of carbon credits

• Concessional withholding tax rate of 5 per cent on interest on ECBs extended upto June 2020.

• MAT credit to be carried forward up to 15 years

• Rationalisation of MAT provisions in line with Ind-AS 

23) NTPC Ltd

• Concessional tax rate of 10 per cent introduced on income by way of transfer of carbon credits

• Concessional withholding tax rate of 5 per cent on interest on ECBs extended upto June 2020.

• Reduction in customs and excise duty rates of certain specified machineries/ parts/ material for power generation  

24) Oil & Natural Gas Corporation Ltd

• Concessional tax rate of 10 per cent introduced on income by way of transfer of carbon credits

• Concessional withholding tax rate of 5 per cent on interest on ECBs extended upto June 2020.

• Reduction in customs and excise duty rates of certain specified machineries/ parts/ material for power generation  

25) Power Grid Corporation of India Ltd

• Concessional tax rate of 10 per cent introduced on income by way of transfer of carbon credits

• Concessional withholding tax rate of 5 per cent on interest on ECBs extended upto June 2020.

• MAT credit to be carried forward up to 15 years

• Rationalisation of MAT provisions in line with Ind-AS 

26) Reliance Industries Ltd
 

• Concessional tax rate of 10 per cent introduced on income by way of transfer of carbon credits

• Concessional withholding tax rate of 5 per cent on interest on ECBs extended upto June 2020.

• MAT paid to the extent of FTC claimed cannot be carried forward

• Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise

27) Tata Power Co. Ltd

• Concessional tax rate of 10 per cent introduced on income by way of transfer of carbon credits

• Concessional withholding tax rate of 5 per cent on interest on ECBs extended upto June 2020.

• Reduction in customs and excise duty rates of certain specified machineries/ parts/ material for power generation  

• MAT credit to be carried forward up to 15 years

• Rationalisation of MAT provisions in line with Ind-AS 

28) UltraTech Cement Ltd

• Concessional tax rate of 10 per cent introduced on income by way of transfer of carbon credits

• Concessional withholding tax rate of 5 per cent on interest on ECBs extended upto June 2020.

• MAT credit to be carried forward up to 15 years

• Rationalisation of MAT provisions in line with Ind-AS 

29) Bajaj Auto Ltd

• Repeal of R&D Cess on import of technology

• Decrease in duty rate on automobile components like substances used for catalytic convertors, LED lamps etc

• Relaxation in domestic transfer pricing compliance norms. 

• Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise.

30) Bosch Ltd

• Repeal of R&D Cess on import of technology

• Concessional withholding tax rate of 5 per cent on interest on ECBs and RDBs extended upto June 2020

• Relaxation in domestic transfer pricing compliance norms. 

• Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise.

31) Eicher Motors Ltd

• Repeal of R&D Cess on import of technology

• Decrease in duty rate on automobile components like substances used for catalytic convertors, LED lamps etc.

• SEZ deduction clarified to be reduced from total income and not from the income of the undertaking. 

• Impact on purchase of vehicles in cash due to restrictions on payments exceeding INR 3L

• Relaxation in domestic transfer pricing compliance norms. 

• Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise.

32) Hero Motor Corp Ltd

• Repeal of R&D Cess on import of technology

• Decrease in duty rate on automobile components like substances used for catalytic convertors, LED lamps etc.

• SEZ deduction clarified to be reduced from total income and not from the income of the undertaking. 

• Relaxation in domestic transfer pricing compliance norms. 

• Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise.

33) Mahindra and Mahindra Ltd

• Repeal of R&D Cess on import of technology

• Decrease in duty rate on automobile components like substances used for catalytic convertors, LED lamps etc.

• SEZ deduction clarified to be reduced from total income and not from the income of the undertaking. 

• Impact on purchase of vehicles in cash due to restrictions on payments exceeding INR 3L

• Relaxation in domestic transfer pricing compliance norms.

• Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise.

34) Maruti Suzuki India Ltd

• Repeal of R&D Cess on import of technology

• Decrease in duty rate on automobile components like substances used for catalytic convertors, LED lamps etc.

• SEZ deduction clarified to be reduced from total income and not from the income of the undertaking. 

• Impact on purchase of vehicles in cash due to restrictions on payments exceeding INR 3L

• Relaxation in domestic transfer pricing compliance norms. 

• Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise.

35) Tata Motors Ltd (DVR)

• Repeal of R&D Cess on import of technology

• Decrease in duty rate on automobile components like substances used for catalytic convertors, LED lamps etc.

• SEZ deduction clarified to be reduced from total income and not from the income of the undertaking. 

• Impact on purchase of vehicles in cash due to restrictions on payments exceeding INR 3L

• Relaxation in domestic transfer pricing compliance norms. 

• Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise.

36) Tata Motors Ltd

• Repeal of R&D Cess on import of technology

• Decrease in duty rate on automobile components like substances used for catalytic convertors, LED lamps etc.

• SEZ deduction clarified to be reduced from total income and not from the income of the undertaking. 

• Impact on purchase of vehicles in cash due to restrictions on payments exceeding INR 3L

• Relaxation in domestic transfer pricing compliance norms. 

• Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise.

37) Aurobindo Pharma Ltd

• Repeal of R&D Cess on import of technology

• No extension of timeline for weighted deduction of R&D expenditure 

• Relaxation in domestic transfer pricing compliance norms. 

• Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise.

38) Bharti Airtel Ltd

• No clarification brought for clearing ambiguity around amortisation of license fee prior to 1.4.2016. 

• MAT paid to the extent of FTC claimed cannot be carried forward

• Relaxation in domestic transfer pricing compliance norms. 

• Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise.

• TDS on payments made to call centres reduced from 10 per cent to 2 per cent

39) Bharti Infratel Ltd

• Rationalisation of MAT provisions in line with Ind-AS 

• MAT credit to be carried forward up to 15 years 

• Relaxation in domestic transfer pricing compliance norms. 

• Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise.

40) Cipla Ltd

• Repeal of R&D Cess on import of technology

• No extension of timeline for weighted deduction of R&D expenditure 

• Relaxation in domestic transfer pricing compliance norms. 

• Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise.

• MAT paid to the extent of FTC claimed cannot be carried forward

41) Dr. Reddy's Laboratories Ltd

• Repeal of R&D Cess on import of technology

• No extension of timeline for weighted deduction of R&D expenditure 

• MAT paid to the extent of FTC claimed cannot be carried forward

• Relaxation in domestic transfer pricing compliance norms. 

• Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise.

42) Idea Cellular Ltd

• No clarification brought for clearing ambiguity around amortisation of license fee prior to 1.4.2016. 

• Relaxation in domestic transfer pricing compliance norms. 

• Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise.

43) Lupin Ltd

• Repeal of R&D Cess on import of technology

• No extension of timeline for weighted deduction of R&D expenditure 

• Relaxation in domestic transfer pricing compliance norms. 

• Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise.

• MAT paid to the extent of FTC claimed cannot be carried forward

44) Sun Pharmaceutical Industries Ltd

• Repeal of R&D Cess on import of technology

• No extension of timeline for weighted deduction of R&D expenditure 

• Relaxation in domestic transfer pricing compliance norms. 

• Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise.

• MAT paid to the extent of FTC claimed cannot be carried forward

45) Asian Paints Ltd

• Concessional withholding tax rate of 5 per cent on interest on ECBs extended upto June 2020.

• Secondary transfer pricing adjustment proposed where money is not remitted to India in accordance with primary transfer pricing adjustment.

• Relaxation in domestic transfer pricing compliance norms. 

• Higher rate of TCS has been prescribed in case of non-furnishing of PAN.

• MAT credit to be carried forward up to 15 years 

• BCD reduced on specified chemicals & petrochemicals

46) Bharat Heavy Electricals Ltd

• BCD reduced on specified chemicals & petrochemicals

• MAT credit to be carried forward up to 15 years 

• Rationalisation of MAT provisions in line with Ind-AS 

47) Hindustan Unilever Ltd

• MAT credit to be carried forward up to 15 years 

• Rationalisation of MAT provisions in line with Ind-AS 

• Secondary transfer pricing adjustment proposed where money is not remitted to India in accordance with primary transfer pricing adjustment.

• Relaxation in domestic transfer pricing compliance norms. 

• Higher rate of TCS has been prescribed in case of non-furnishing of PAN.

• Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise.

• Increase in export duty on specified aluminium ores and concentrates

• Excise duty exemption on certain waste and scrap of precious metals or metals clad subject to condition

48) I T C Ltd

• MAT credit to be carried forward up to 15 years 

• Rationalisation of MAT provisions in line with Ind-AS 

• Secondary transfer pricing adjustment proposed where money is not remitted to India in accordance with primary transfer pricing adjustment.

• Relaxation in domestic transfer pricing compliance norms. 

• Higher rate of TCS has been prescribed in case of non-furnishing of PAN.

• Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise.

• Increase in basic excise duty on handmade & machine made paper rolled biris

• Increase in basic & additional excise duty, health cess on cigarette, tobacco products and Pan Masala

49) Bharat Heavy Electricals Ltd

• MAT credit to be carried forward up to 15 years 

• Rationalisation of MAT provisions in line with Ind-AS 

• Relaxation in domestic transfer pricing compliance norms. 

• Concessional tax rate of 10 per cent introduced on income by way of transfer of carbon credits

• Higher rate of TCS has been prescribed in case of non-furnishing of PAN.

50) Coal India Ltd

• MAT credit to be carried forward up to 15 years 

• Rationalisation of MAT provisions in line with Ind-AS 

• Relaxation in domestic transfer pricing compliance norms. 

• Concessional tax rate of 10 per cent introduced on income by way of transfer of carbon credits

• Higher rate of TCS has been prescribed in case of non-furnishing of PAN.

51) Hindalco Industries Ltd

• MAT credit to be carried forward up to 15 years 

• Rationalisation of MAT provisions in line with Ind-AS 

• Relaxation in domestic transfer pricing compliance norms. 

• Concessional tax rate of 10 per cent introduced on income by way of transfer of carbon credits

• Higher rate of TCS has been prescribed in case of non-furnishing of PAN.

52) Tata Steel Ltd

• MAT credit to be carried forward up to 15 years 

• Rationalisation of MAT provisions in line with Ind-AS 

• Relaxation in domestic transfer pricing compliance norms. 

• Concessional tax rate of 10 per cent introduced on income by way of transfer of carbon credits

• Higher rate of TCS has been prescribed in case of non-furnishing of PAN.

• BCD reduced on MgO coated cold rolled steel coils for use in manufacture of CRGO steel

• Increase in export duty on specified aluminium ores and concentrates