Third Stimulus - The Notifications have come – as promised by us
ON February 16, 2009, when the whole media was aghast and the stock market nosedived, we had promised that the stimulus Notifications will come soon. Please see Interim Budget - Anti-Climax - Surprised Channels - Shocked Opposition - But you can still wait for those Stimulus Notifications. We had promised that the notifications will come in a couple of weeks – we were wrong; they came a little earlier.
The effective rates of duties on goods and services now stand at 8% and 10% respectively, which also gives a preview of the likely rates of GST as and when it is introduced. Then in such a case, can we expect GST from April 1, 2010? This is a million dollar question which may get an answer in the next regular budget as and when it will be presented by the new Government.
Interestingly, while making a statement on the tax rate cuts in Parliament, the Acting Finance Minister, Mr Pranab Mukherjee mentioned that the duty relief given on December 7, 2008 is being extended beyond March 31, 2009. While the whole world (read print and electronic media) including TIOL lapped it up as God-sent manna, giving unprecedented and unwarranted mileage to the Government and the FM, the fact of the matter is that neither the earlier Notifications issued on December 7, 2008 nor the current Notifications has any sunset clauses stipulating that the duty relief is applicable only for a certain fixed period of time (except for the import of Naphtha which had a sunset clause when it was introduced in December 7, 2008 but now even this is done away with).
The highlights of the new stimulus package are detailed below.