Indian Finance Minister, Shri Pranab Mukherjee, in response to the Finance Bill 2010 debate in the Indian parliament (Lok Sabha), announced an additional round of tax concessions and adjustments.

Mukherjee announced several changes to direct and indirect taxes, and services taxes in a number of business sectors. He also granted a package of debt relief for the nation's coffee growers, who have suffered as a result of coffee prices falling to historic lows between 2000 and 2004.

In the area of direct taxes, the finance minister announced the expansion of a scheme whereby private investors can avail of a 100% deduction for the cost of building hospitals with at least 100 beds for the purposes of the Income Tax Act. Currently, new hospitals built in "excluded areas" do not qualify for this tax break, but Mukherjee has proposed to remove this impediment so that hospital construction projects anywhere in India qualify for the 100% deduction. The 100-bed limit remains in place. New housing projects in areas designated as slums will also be able to take advantage of this investment-linked deduction.

Following on from the government's decision to allow tax-neutrality for the conversion of a company into a Limited Liability partnership, it is proposed in the Finance Bill that the transfer of shares by the shareholders of the company will be exempt from tax in respect of such a conversion.

The Finance Bill also provides for service tax relief for the construction sector, and exemption from service tax for certain housing schemes aimed at improving the lives of the urban poor. In addition, government-provided vocational training schemes will benefit from exemption from service tax under the Finance Bill. Much to the disappointment of the aviation industry, however, the finance minister confirmed the government's intention to apply service tax to airline tickets at a maximum of INR100 (USD2.22) for domestic flights and INR500 on international journeys.

In the area of indirect taxes, Mukherjee announced the following changes, among others:

The excise duty on hand-rolled cheroots priced up to INR3 per stick was reduced to 10% ad valorem. Similarly, the additional excise duty on this product would now be 1.6% ad valorem;

Central excise duty, which was reduced from 8% to 4% on corrugated boxes and cartons when they are manufactured starting from kraft paper would now be reduced similarly on cartons made from corrugated paper or paperboard;

A concessional excise duty of 4%, subject to certain conditions, on paper and paperboard manufactured from non-conventional raw material such as waste paper would now apply to waste paper too;

Full exemption from customs duty applied to tunnel boring machines has been extended to include parts and components;
11 specified drugs including two anti-cancer and one for the treatment of AIDS, which had basic customs duty reduced to 5%, would also be exempted duty;

Basic customs duty would be fully exempt on specified parts or components required for the manufacture of Optical Disc Drives;

Acetate rayon tow would be fully exempt from a special duty of 4%. Flax fibre and yarn would be fully exempt from basic customs duty in order to encourage domestic value addition.

Export duty at the statutory rate of INR2,500 per metric tonne  imposed on raw cotton with effect from April 9, 2010 would now be increased to INR10,000 with immediate effect;

The export duty on iron ore lumps, increased from 5% to 10% and on fines from 0% to 5% in December, 2009, would be increased further to 15%;

The basic customs duty on stainless steel melting scrap would be reduced from 5% to 2.5%.