Latest Expert Exchange Queries

GST Demo Service software link:
Username: demouser Password: demopass
Get your inventory and invoicing software GST Ready from Binarysoft
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Popular Search: VAT Audit :: ACCOUNTING STANDARDS :: articles on VAT and GST in India :: ARTICLES ON INPUT TAX CREDIT IN VAT :: TAX RATES - GOODS TAXABLE @ 4% :: list of goods taxed at 4% :: TDS :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: form 3cd :: Central Excise rule to resale the machines to a new company :: due date for vat payment :: VAT RATES :: ACCOUNTING STANDARD :: empanelment :: cpt
Service Tax »
  GST Network simplifies returns filing process
 Why is the successful roll-out of the e-way bill necessary?
 How service tax became revenue lifeline for the Govt
 Three simple tricks to save income tax without investing fresh funds
 Goods and Services Tax (Compensation to States) Amendment Act, 2017.
 Services sector need to brought under Section 72A of the Income-Tax Act
 Simplifying GST: Creating a Grand Simple Tax
 The way ahead for goods and services tax
 Goods & Service Tax (GST): Recent Clarifications
 Tax payers can see status of returns filed on GSTN portal
 Export And Import Of Goods Under GST

Government plans to impose additional levies on cigarettes and diesel cars
November, 02nd 2011

The finance ministry is exploring plans to impose additional levies on cigarettes and diesel cars, measures that some officials think could help it earn much needed revenues without stoking inflation or hurting growth.

Taxes on services could also be increased under these plans aimed at helping the cash-strapped government cope with lower-than-budgeted revenues in a slowing economy, two finance ministry officials familiar with the proposals told ET.

"Various options, including raising duties on diesel cars and cigarettes, are on the table," said one official, asking not to be identified. The second official said a frantic search was on for all options to boost revenues as the finance ministry was also keen to demonstrate its fiscal prudence at a time of great stress. "All efforts are being made to ensure the fiscal deficit target of 4.6% of GDP is met and there is no slippage."

Finance Minister Pranab Mukherjee is expected to take a final decision on the levies after a review of the indirect tax collection figures for October, which will become available later this week. An increase in excise duty and service tax is said to have figured in the discussions at Prime Minister Manmohan Singh's meeting with economists on October 15.

Excise duty collections fell for the first time in 16 months in September while customs duty collections remained flat, raising fears the government may fail to meet the revised target of Rs 4.40 lakh crore for indirect taxes. On Monday, data showed the government has run up a fiscal deficit of 70% of budget estimates half-way into the financial year despite a near-freeze in expenditure.

The officials said relevant departments had been asked to study the implication of any increase in levies on the two sectors, including calculating the revenues these proposals can fetch. The finance minister is not keen on an across-the-board increase in taxes for fear of hurting already faltering growth, said one of them, who is familiar with the minister's thinking. Economic growth slipped to 7.7% in the fiscal first quarter and there is now near-consensus that this year's GDP growth will be about 7.5% and not the near-9% budgeted at the start of the fiscal.

Cigarettes have long been considered a favourite target for any government facing revenue challenges. Increasing levies on them does not prick ministers' conscience and neither does it impact growth in the sector. The finance ministry feels topping up the excise levy on diesel cars will not make a material dent in demand.

Reluctant to hike diesel price

There exists a waiting period of 2-3 months on most diesel models because of the steady rise in petrol prices. The government has been reluctant to increase prices of diesel for fear of stoking inflation. The finance ministry reasons that since the government is not able to raise diesel prices, it is justified in levying more tax on diesel cars. Officials say raising levies on these items could be politically expedient and administratively simple.

Imposition of duties on these products would also not the hurt common man, a crucial consideration for the government ahead of major assembly elections next year. Duties on diesel cars can be increased though a simple notification although to do the same on cigarettes, it will need to issue an ordinance. The government earns about Rs 8,000 crore from duty on diesel cars and Rs 10,000 crore on cigarettes each year.

Excise duty on cigarettes ranges from Rs 509 to Rs 1948 per thousand sticks, which is the maximum that the government can impose without seeking Parliament's approval. At present the duty on cars is based on the length and not the fuel. Small cars attract an excise duty of 10%, while cars with engine capacity more than 1500 cc attract 22% duty. An expert panel headed by former Planning Commission member Kirit Parikh last year recommended imposition of additional excise duty on diesel vehicles of up to Rs 80,000.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Our Vision

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions