Service tax exemption on exports confirmed: input taxes neutralised and refund modalities for related non-input services under consultation.
The Ministries of Finance and Commerce confirm unified policy that taxes on inputs and input services used for export goods or services are neutralised under rebate, refund and drawback schemes, and that modalities are being developed with the Department of Commerce to refund or rebate service tax on certain related non-input services and on services received from or rendered abroad.

Tax incentives for North Eastern businesses expanded; ESOP valuation, perquisite rules and cooperative bank reorganisation clarified.
Amendments expand the positive business list to include development, operation and maintenance of infrastructure, granting venture capital funds investing in such infrastructure pass-through treatment; reduce valuation rates for employer-provided rent with a revised city-tiered scale and allow deduction of amounts recovered from employees; require ESOP fringe benefits to be valued at fair market value on vesting less employee consideration while capital gains holding is measured from allotment or transfer; permit tax-neutral amalgamation/demerger treatment for cooperative banks enabling set-off and carry forward of unabsorbed losses and depreciation; introduce a ten-year full profit deduction for qualifying undertakings in the North-Eastern region and Sikkim undertaking specified manufacturing or eligible businesses within a defined window.

Tax policy changes expand thresholds and revise perquisite valuation, while adjusting indirect duty and procedural tax rules.
The Finance Bill 2007 amends direct and indirect tax provisions: it raises individual tax thresholds and allowances, revises valuation rules for concessional accommodation under Section 17 with retrospective relief, confirms ESOP taxation assessed at vesting, extends venture capital pass-through to infrastructure, and proposes administrative and exemption reviews. Indirect tax changes include increased service tax threshold, selective reductions and exemptions in customs and excise duties, mandatory e-payment of excise, and targeted sectoral duty adjustments. Procedural measures withdraw condonation for delayed Section 12A filings while permitting later applications effective from filing date.