New Delhi, Feb 28: Finance Minister P. Chidamabaram on Thursday announced that items like tobacco products, SUVs and mobile phones would cost more.
Presenting Budget 2013-14 proposals in Parliament, Chidambaram said excise duty on SUVs would be increased from 27 to 30 percent, but added that excise duty would not apply to SUVs registered as taxies.
He also said that cigarettes would cost more as specific excise duty increased by about 18 percent.
Similar increases are proposed on cigars, cheroots and cigarillos. Duty on mobile phones priced above Rs. 2000, he said, has been raised to six percent from the current one percent.
According to an official release, the general budget reiterates that clarity in tax laws, a stable tax regime, a non-adversarial tax administration, a fair mechanism for dispute resolution and independent judiciary for greater assurance is underlying theme of tax proposals. It is proposed to set up the Tax Administration Reforms Commission.
As regards Direct Taxes, a relief of Rs. 2000 for the Tax Payers in the first bracket of Rs. 2 lakhs to Rs. 5 lakhs have been proposed. A surcharge of 10 percent on persons (other than companies) whose taxable income exceeds Rs.1 crore have been levied. Surcharge has been increased from 5 to 10 percent on domestic companies whose taxable income exceed Rs. 10 crore. In case of foreign companies, surcharge will increase from 2 to 5 percent, if the taxable income exceeds Rs. 10 crore. Additional surcharges to be in force for only one year.
Chidambaram said, education cess to continue at three percent.
He also announced the grant of investment allowance at the rate of 15 percent to manufacturing companies that invest more than Rs. 100 crore in plant and machinery during the period 1.4.2013 to 31.3.2015. Concessional rate of tax of 15 per cent on dividend received by the Indian companies from its foreign subsidiary proposed to continue for one more year. It is proposed that TDS at the rate of one percent on the value of the transfer of immovable property where the consideration exceeds Rs. 50 lakhs to be levied.
Agricultural land to be exempted from TDS. Modified provisions of GAAR will come into effect from 1.4.2016. It is also proposed to increase the rate of tax on payments by way of royalty and fees for technical services to non-residents from 10 percent to 25 percent.
The budget also proposes to introduce Commodities Transaction Tax (CTT) in a limited way. However, agricultural commodities will be exempted. A number of administrative measures such as extension of refund banker system to refund more than Rs. 50,000, technology based processing, extension of e-payment through more banks and expansion of in the scope of annual information returns by Income-tax Department.
With regards to Indirect Taxes, Chidambaram proposed no change in the normal rates of 12 percent for excise duty and service tax. Similarly, no change has been made in the peak rate of custom duty of 10 percent for non-agricultural products.
Custom duty on free gold limit increased to Rs. 50,000 in case of male passenger and Rs. 1,00,000 in case of a female passenger subject to conditions. Duty on imported luxury goods such as high end motor vehicles, motor cycles, yachts and similar vessels increased.
Custom duty on Set Top Boxes increased from 5 to 10 percent while on raw silk increased from 5 to 15 percent to boost domestic production. Custom duty on specified machinery for manufacture of leather and leather goods including footwear reduced from 7.5 to 5 percent.
The budget also proposes that period of concession available for specified part of electric and hybrid vehicles extended upto 31 March 2015.
The budget proposes ‘Voluntary Compliance Encouragement Scheme’ where a defaulter may avail of the scheme on condition that he files a truthful declaration of Service Tax dues since 1.10.2007. It is a one-time scheme in which interest, penalty and other consequences will be waived.
The budget proposes to mobilize Rs. 18,000 crore in which new proposals in indirect taxes will yield Rs. 4,700 crore and direct taxes of Rs. 13,300 crore.
In a major step to rationalize taxation on goods and services, the Budget has earmarked Rs. 9,000 crore towards the first installment of the balance of CST compensation. The Minister said that overwhelming majority States have agreed that there is a need for Constitutional amendment to pass GST law. It will be drafted by the State Finance Ministers and the GST Council, Chidambaram added.(ANI)