Latest Expert Exchange Queries
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) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: form 3cd :: list of goods taxed at 4% :: VAT Audit :: TDS :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: TAX RATES - GOODS TAXABLE @ 4% :: articles on VAT and GST in India :: ACCOUNTING STANDARDS :: ARTICLES ON INPUT TAX CREDIT IN VAT :: Central Excise rule to resale the machines to a new company :: cpt :: ACCOUNTING STANDARD :: due date for vat payment :: VAT RATES :: empanelment
Customs and Excise »
  Rate of exchange of conversion of the foreign currency with effect from 21st October, 2016
 Rate of exchange of conversion of the foreign currency with effect from 21st October, 2016
 Seeks to amend Notification No. 27/2014-Central Excise
 Government doubles limit of excise duty evasion for arrest and prosecution
 Excise duty evasion limit to warrant arrest revised to Rs 2 crore
 Guidelines for launching of prosecution in relation to offences punishable under the Customs Act, 1962
 GST notification triggers uncertainty over excise duty
 Preparing for GST: govt looking at restructuring excise/customs cadre
 Refund of Terminal Excise Duty (TED) under Deemed Exports where Duty has been paid from CENVAT Credit and ab-initio waiver is not available.
 CBEC directs customs officials for random search of vessels
 Rate of exchange of conversion of the foreign currency with effect from 7th July, 2016

Excise cuts may be selectively withdrawn to boost revenues
June, 13th 2009

The Union finance ministry is considering an increase in the central excise duty for some of the products that had benefited from the two rounds of reductions announced by the government as part of its fiscal stimulus measures last year.

In December 2008, the government had reduced the general rate of central excise duty for all products, except petroleum goods, from 14 to 10 per cent. In February, Finance Minister Pranab Mukherjee cut the general rate of central excise duty further to 8 per cent and the service tax rate from 12 to 10 per cent. The annual impact of the duty cuts on the governments tax revenues was estimated at over Rs 75,000 crore.

With the governments revenues in the first two months of this year showing no signs of buoyancy (direct tax collections grew only 5.5 per cent), the finance ministry is now identifying products belonging to those sectors that are doing relatively better than those severely affected by the economic downturn. The objective is to shore up revenues for the current fiscal year by selectively raising the central excise duty on products doing well, instead of an across-the-board increase in the duty.

The ministry is studying the latest trends in the industrial growth figures for different product categories to formulate a list of such goods for which general excise rate can be increased to either 10 per cent, the level that prevailed before the Interim Budget announcement, or 14 per cent, the level before December 2008.

Sectors that are likely to be exempted from any increase in the excise duty under this proposal include commercial vehicles and textiles, said government officials.

On the other hand, the latest infrastructure and industrial output data for April 2009 indicate a pick-up in demand for certain sectors like cement. Eleven out of 17 industry groups, accounting for nearly 60 per cent weight in Index of Industrial Production (IIP) have shown growth on an annual basis in April 2009. Many of the items in these sectors could be considered for an excise duty increase.

The ministrys proposal stems from the realisation that the Interim Budget had accounted for the revenue loss from the duty cuts only for the first four months of the current fiscal. Thus, if the general rate of excise duty is allowed to remain at the level outlined in the Interim Budget, the governments fiscal deficit would go up by about a percentage point of GDP in the normal course.

A selective increase in excise duty is also under consideration because the finance ministry is already under pressure to spend more on various social sector schemes. At the same time, it is trying hard to contain the increase in the fiscal deficit for the current financial year, over and above the target of 5.5 per cent of GDP already projected in the Interim Budget.

At the level of deficit projected in the Interim Budget, the Union government will borrow around Rs 3,60,000 crore from the market in the current financial year. A higher fiscal deficit level is likely to crowd out private sector investments, especially at a time when firms resume their investment plans. The fiscal deficit in the year ended March 2009 exceeded the revised estimates by 0.2 percentage points to reach 6.2 per cent of GDP.

The need to increase the general rate of excise duty and mobilise more revenue has also arisen because the ministry realises that the scope for mobilising substantial resources through disinvestment of government equity in public sector undertakings (PSUs) is limited because of the political opposition to the idea from two of the governments political allies.

Even if disinvestment of a few PSUs is cleared, the earlier estimates of mobilising Rs 25,000 crore from equity sales during the year now appear unrealistic, said government officials. Similarly, the ministry is now of the view that it cannot achieve the earlier target of mobilising Rs 40,000 crore from the auction of 3-G licences for the telecommunications sector. A more realistic estimate of collections from this route has been put at Rs 12,000 crore for the year.

The ministry is also conscious of the fresh challenges a selective increase in excise duty would pose for the governments plan to introduce a goods and services tax (GST) from April 2010.

But its view is also influenced by the need to raise more resources during the current financial year and the realisation that the plan for the GST regime may need some revision in view of the political opposition to the idea and the unpreparedness of many states to opt for a GST system from the next financial year.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
E-catalogue online catalogue E-brochure online brochure online product catalogue online product catalogue e-catalogue Indi

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