Living life dearer
Audio and video CDs, readymade garments, and even branded jewellery could become marginally dearer, besides 130 other items including tea, coffee and biscuits. HT reports. Service tax in a new avatarbusiness Updated: Mar 01, 2011 02:11 IST
Audio and video CDs, readymade garments, and even branded jewellery could become marginally dearer, besides 130 other items including tea, coffee and biscuits.
All of them would now be brought under the excise tax net, though the burden would be of the order of 1%. Finance minister Pranab Mukherjee, however, decided to retain the standard rate of excise duty at 10% amid fears that with economic recovery, there would be a rollback of stimulus measures.However experts say that the price hike would be minuscule.
Certain items such as homeopathic medicines, baby and adult diapers, raw pistachios, incense sticks, cranberry-based products could become cheaper with customs duty being brought down. The basic customs duty on raw silk has been reduced from 30% to 5%.
Mukherjee said that the excise and customs duty proposals are expected to result in a net revenue of Rs 7,300 crore.
He also said that though he had the option to rollback the central excise duty to pre-global financial crisis level, he decided against it as all indirect taxes would be subsumed in the proposed Goods and Services Tax (GST) to be rolled out on April 1, 2012.
“I would like to see improved business margins translate into higher investment rates. I would also like to stay my course towards GST. I have therefore decided to maintain the standard rate of central excise duty at 10%,” Mukherjee said while unveiling the Union Budget for 2011-12.
The Centre had announced a host of measures in 2008 to combat the impact of the global financial crisis. There was fear that excise duties would be raised as part of a rollback strategy of the stimulus measures amid a strong economic recovery.
“The finance minister has taken the opportunity of rationalising and reforming indirect tax laws through this budget.
“This is very encouraging. It is a well-balanced budget and the fact that no duties were raised is a bold step,” said G Ramaswamy, president, Institute of Chartered Accountants of India (ICAI).