Jan 8, 2004|
Mini Budget: Highlights
In what could be termed as a mini-budget, the Finance Minister has announced a series of excise and custom duty changes across products, providing one of the strongest signals of an early Lok Sabha poll. The government has tried to make technological products cheaper, given incentives to encourage airline travel and investment in the power sector. The minister has also tried to make life simpler for the tax payer. The following are the highlights of his announcement:
Major custom and excise duty changes
- Custom duty on mobile phones slashed to 5% (10% earlier)
- Custom duty on coal cut to 15% (25% earlier)
- Custom duty on power equipment cut to 10% (25% earlier)
- Specified infrastructure equipment for basic telephony, cellular, Internet, V-SAT, radio paging and public mobile radio trunked services are being exempted from customs duty
- Excise duty on computers halved to 8%. Recorded VCDs and DVDs are also being exempted from excise duty
- Custom duty on life saving drugs and equipment cut to 5%. Also, customs duty on artificial limbs and specified rehabilitation aids is being reduced to 5%. These items will also have excise duty exemptions. Excise duty on medical, surgical, dental and veterinary furniture is being reduced from 16% to 8%.
- Peak rate of customs duty on non-agricultural goods is being reduced from 25% to 20%
- Special additional duty of customs (SAD) of 4% has been done away with
Sops for Aviation industry
- Excise duty on aviation turbine fuel halved to 8%
- Inland air travel tax of 15% removed
- Baggage rules liberalized, Laptops forming part of baggage exempt from import duty
- Foreign travel tax of Rs 500 per passenger is being done away with
Sops for power industry
- Customs duty on T&D projects is reduced from 25% to 10%
- Customs duty on electricity meters cut from 25% to 15%
*All the aforesaid changes will take effect from January 9, 2004
Direct Tax initiatives (with effect for April 1, 2004)
- Employees with salary income up to Rs 150,000 per annum need not file an income tax return. Salary certificate furnished by employer to the IT department to be treated as return.
- Pensioners to be exempt from the purview of one-by-six scheme, thereby exempting pensioners who do not have taxable income, from filing returns.
- For perquisite valuation, rates of interest for housing loans etc., to be reduced, to bring them in line with the prevailing market rates.
- Added to the above, the ministry will also enable furnishing of paperless income-tax returns by the introduction of direct filing through Internet under digital signatures for salaried taxpayers, professionals like doctors, accountants etc.
All in all, the government has tried to make a final bid to woo the electorate for the 2004 Lok Sabha elections. But the steps taken above are largely in the right direction.
To read what impact these announcements could have on sectors, please click here
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