FinMin mulls excise hikes in diesel-run cars, tobacco
August, 10th 2011
The indirect tax chief says there are no plans to raise excise duty on tobacco, diesel cars even as Finance Ministry sources indicate to CNBC TV18 that a 30 to 40 % increase in excise duties on tobacco products could be on the cards. CNBC-TV18's Akanksha Sethi reports.
Also, there could be a three tier tax hike on diesel-run cars depending on the size of the vehicle. The indirect tax target have been pushed upto Rs 4,40,000 crore, an increase of 10% from what was in the budget.
The first quarter collections of excise have suffered due to the slowdown in manufacturing. Therefore, concerns have been raised over whether the indirect tax target can be achieved. A ripple effect of a diesel-run car hike is also feared.
The Finance Ministry has been very clear that it does not want to do anything to jeopardize growth in any way. The ministry has prepared the proposal but it is accounting the negative impact of the hike on the economy. It will take its decision after a month or so after the Monsoon session is over in consultation with the Prime Minister.