Finance Minister P Chidambaram on Friday announced key cuts in customs and excise duty, bringing cheers to some of the sectors.
The minister reduced the excise duty on all goods produced in the pharmaceutical sector from 16 per cent to 8 per cent. Making some life saving drugs and bulk drugs used for the manufacture of such drugs cheaper with the customs duty on them slashed to 5 per cent from 10 per cent earlier. The same has been totally exempted from excise duty or countervailing duty (CVD).
Excise duty on buses and their chassis was cut from 16 per cent to 12 per cent while the excise duty on small cars was slashed from 16 per cent to 12 per cent and on hybrid cars from 24 per cent to the general revised rate of 14 per cent.
Chidambaram announced a cut in excise duty on two-wheelers and three-wheelers from 16 per cent to 12 per cent.
The minister also reduced the customs duty on Project Imports from 7.5 per cent to 5 per cent. However, he imposed a 4 per cent special CVD on a few specified projects in the power sector.
Steel melting scrap and aluminium scrap will become less costlier, as the customs duty came down from 5 per cent to nil in a move to improve supply of raw material.
He also reduced the excise duty on paper, paper board and articles made there from manufactured out of non-conventional raw materials by units not having an attached bamboo/wood pulp making plant from 12 per cent to 8 per cent with a further reduction on clearances up to 3,500 MT from 8 per cent to nil.
Excise duty on certain varieties of writing, printing and packing paper were also reduced from 12 per cent to 8 per cent.
In order to reduce the cost of manufacture of cattle and poultry feeds, Chidambaram reduced the duty on vitamin premixes and mineral mixtures from 30 per cent to 20 per cent and on phosphoric acid from 7.5 per cent to 5 per cent. The duty on bactofuges will be reduced from 7.5 per cent to nil. This will increase the shelf life of milk and benefit the dairy industry, the minister proposed.
With this year's budget, IT/electronic hardware would become cheaper as the Finance Minister has fully exempted them from duty specified parts of set top boxes and specified raw materials for use.
To establish parity between devices used in the information/ communication sector and the entertainment sector, he also slashed the duty on convergence products from 10 per cent to 5 per cent.