Cars, two-wheelers to become cheaper, as Chidambaram slashes excise duties
To give relief to the automobile industry which is registering unprecedented negative growth, Finance Minister P. Chidambaram on Monday proposed to reduce the excise duty for small cars, motorcycles, scooters and commercial vehicles by four percent.
It will be cut from 12 percent to 8 percent. The excise duty on SUVs is proposed to be reduced by 6 percent. From 30 percent to 24 percent.
In case of large and mid-segment cars, it is proposed to reduced excise duty by 3 percent i.e. 27/24 percent to 24/20 percent. All these reduced rates will be applicable upto June 30, 2014.
To stimulate growth in capital goods and consumer non-durable, it is proposed to reduce the excise duty from 12 to 10 percent on all goods for a period up to June 30, 2014. It is applicable to all goods falling under Chapter 84 and 85 of the Schedule to the Central Excise Act.
To encourage the domestic production of mobile handsets and reduce the dependence on imports, it is proposed to restructure the excise duty for category of mobile handsets. The rates will be 6 percent with CENVAT credit or 1 percent without CENVAT credit.
To boost domestic production of soaps and oleo chemicals, it is proposed to rationalize the customs duty structure on non-edible grade industrial oils and fractions, fatty acids and fatty alcohols at 7.5 percent.
It is proposed to withdraw the exemption from CVD on similar imported machinery to encourage domestic production of the specified road construction machinery.
The Government has succeeded in obtaining information in 67 cases of illegal Off-shore Accounts and action is underway to determine the tax liability as well as impose penalty. Prosecutions for willful tax evasion have been launched in 17 other cases.
Setting-up a Research Funding Organization that will fund research projects selected through a competitive process. Contributions to that organization will be eligible for tax benefit.
The Direct Taxes code (DTC) is ready and it will be placed on the website for a public discussion. The Finance Minister appeals to all political parties to resolve to pass the GST laws and the DTC in 2014-15.
(Posted on 17-02-2014)