Finance minister Arun Jaitley on Thursday proposed a slew of reductions on excise and customs duties on daily use and aspirational products, even as he brought in more services under the service tax ambit. The proposed cuts are deft tweaks aimed at the salaried class in a Budget otherwise seen to be lacking in big-bang announcements.
“I am sure these measures would incentivise value-addition, generate income and create more jobs in India,” said the minister, while making the proposals.
Jaitley’s tax rationalisations include exempting customs duty on input components used in the manufacture of computers and bringing it down by 10% to 0% for cathode ray TVs, LCDs and LED flat panels.
The minister has also proposed to reduce the excise duty on footwear, food processing and packaging machinery and solar power and wind power equipment.
Jaitley reiterated that the government would continue to maintain the 8% exemption on excise duty of small cars, two-wheelers and commercial vehicles. He also said that the excise duty on capital goods and consumer durables would remain at 10% until December 31, 2014.
Further, in order to provide relief to the domestic stainless steel industry that had been reeling under severe underutilisation, the import duty on flat-rolled products was raised from 5% to 7.5%. The finance minister also imposed an education cess on imported electronic products to bring cost parity between domestically produced products and imported goods.
{{/usCountry}}Further, in order to provide relief to the domestic stainless steel industry that had been reeling under severe underutilisation, the import duty on flat-rolled products was raised from 5% to 7.5%. The finance minister also imposed an education cess on imported electronic products to bring cost parity between domestically produced products and imported goods.
{{/usCountry}}The finance minister said the tax cuts were a way to offer incentives to the manufacturing sector that has been “under stress due to a variety of reasons”.
However, he also sought to widen the service tax net by bringing in more services like online and mobile advertising and service tax by radio-taxis under the service tax ambit.
Sachin Menon, national head, indirect tax, KPMG India, said that the indirect tax proposals have been “aimed at boosting the manufacturing sector, reducing litigation, broadening the service tax base, facilitating trade and disposal of appeals” .
The government expects to increase its indirect tax collections by 20.28% to touch Rs 6,24,902 crore in the current fiscal.