FM makes valiant attempt to control soaring prices and inflation – many tax sops announced in amendment to the Finance Bill 2008
In an attempt aimed at reining the prices which in recent past are looking only towards north, the North Block yesterday rolled out many proposals by way of reducing the import duties and imposing export duties to discourage the exports. The amendments are:
Import duty concessions:
Basic customs duty on pig iron and mild steel products viz. sponge iron, granules and powders; ingots, billets, semi-finished products, hot rolled coils, cold rolled coils, coated coils/sheets, bars and rods, angle shapes and sections and wires has been reduced from 5% to Nil.
TMT bars are fully exempted from CVD which is currently 14%.
Basic Customs duty on the critical inputs for manufacture of steel, i.e. metallurgical coke, ferro alloys and zinc has been reduced from 5% to Nil.
Basic customs duty on skimmed milk powder has been reduced from 15% to 5% for a Tariff Rate Quota of 10000 metric tonnes per annum.
Customs duty has been reduced on butter oil, which is used for reconstituting liquid milk, from 40% to 30%.
Export duty imposed: ,
Export duty is proposed to be imposed on steel items at the following rates:
15% on specified primary forms and semi-finished products, and hot rolled coils/sheet.
10% on specified rolled products including cold-rolled coils/sheets and pipes and tubes.
5% on galvanized steel in coil/sheet form.
A uniform statutory rate of 20% is incorporated in the Export Schedule and the aforesaid rates would operate through notifications to be issued later. This comes into effect after the enactiment of the finance bill, as stated by FM in the House.
An export duty of Rs 8,000/- is proposed to be imposed on export of basmati rice. A commensurate reduction in the Minimum Export Price is proposed at US$ 1,000 per tonne from the current MEP of USD 1200.
Other changes:
Cut and polished colored gemstones and rough synthetic gemstones that currently attract 5% duty are fully exempted from the basic customs duty.
Basic customs duty on newsprint is reduced from 5% to 3%.
With effect from 1 st May 2008, basic customs duty on Tapioca Starch is increased from 30% to 50% coinciding with the expiry of the safeguard duty.
It is proposed that the EOUs would be liable to pay anti-dumping duty on imported inputs either sold directly or contained in finished products that are sold in the domestic market.
Please see Finance Bill + Customs Tariff Notification , Dated: April 29, 2008
Central Excise:
Packaged cement with a price above Rs.250 per bag (of 50 kg.) is currently chargeable to a specific rate of duty of Rs.600 per metric tonne (PMT). It is proposed to levy duty at ad valorem rate of 12% of the retail sale price for the cement in this price bracket. Accordingly statutory rate is being enhanced to Rs 900 PMT.
Exemption from excise duty on electric cars is extended to all electrical vehicles including two-wheelers and three-wheelers.
Replaceable kits for water filters functioning without electricity and pressurised tap water are fully exempted from excise duty.
Excise duty/CVD exemption has been restored on projectile type of shuttle less looms.