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Finance Bill passed with no change in fuel levies
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SME Times News Bureau | 30 Apr, 2010
The Lok Sabha Thursday passed the Finance Bill for 2010-11, with a special relief package for coffee growers, and tax concessions for healthcare, auto and realty sectors, but without any change in the levies on petroleum products.
Finance Minister Pranab Mukherjee moved the bill after the fresh amendments after a 50-minute final reply to the debate on the subject in the lower house of parliament, which was then passed by voice vote.
His concessions included a service tax exemption on low-cost housing schemes, income ax rebate for hospitals that have over 100 beds, reduction in excise on craft paper to 4 percent, and extension of excise rebate on auto components for construction machinery.
Mukherjee said that the government has been keenly watching the quantum of cotton exports well as the price situation and the statutory rate for raw cotton is being enhanced to Rs.10,000 per metric tonne (PMT) while maintaining the effective rate at the current level.
"Except in the case of export duty on raw cotton, the changes in the customs and excise duties would come into force with immediate ," he added.
He also informed that the duty on iron ore lumps is being increased further to 15 percent, keeping in view the trend in the quantum of exports and domestic and international prices.
The minister also reduced the customs duty on 11 drugs including those for treatment of AIDS and cancer, exempt components for manufacture of optical discs from such levy and reduced the counterveiling duty on waste paper to 4 percent.
During the course of his reply to the debate, Mukherjee justified the hike in excise and customs duties on crude oil and some petroleum products because of the prevailing global situation and said he had taken a "correct" stand by not touching retail prices.
"Instead of duties, I could have taken the administered price mechanism route. But I did not do so because to me it would not have been correct," the minister said in his final reply to the debate on the Finance Bill for the current fiscal in the Lok Sabha.
He said it was because of hiking the duties that the state governments would get a 32 percent share of the measure, amounting to Rs.26,000 crore, based on the formulae for sharing of central revenues.
The minister's comments came against the backdrop of cut motions moved by opposition parties on the demands of grants of the oil ministry, basically expressing displeasure over hikes in duties. The cut motions were defeated Tuesday.
In the budget speech delivered Feb 26, Mukherjee had proposed to restore the basic duty of 5 percent on crude oil, 7.5 percent each on diesel and petrol, and 5 percent on other petroleum products. He also proposed sought to hike excise on petrol and diesel by Rs.1.
He also took up another step that was widely criticised and said the impact of service tax on domestic and international air travel in economy class would be minimal and amount to no more than Rs.100 and Rs.500, respectively, at the highest level.
"Let me tell you, the impact is not all that high," Mukherjee said in his final reply to the debate on the Finance Bill for the current fiscal, adding that he was exempting from service tax the air travel to and from the north-eastern states.
In the budget proposals, air travel on economy class was also sought to be brought into the service tax net. The government was already imposing such a tax on business and first class air travel.
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Import |
Export |
US Dollar
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