Highlights of Budget 2001-02
SOME HIGHLIGHTS OF THE BUDGET ARE AS FOLLOWS:
- A unified Cenvat of a single excise duty of 16 per cent.
- Exemption of 30 per cent on income tax for income between Rs 40,000 and Rs 1 lakh under Section 88, instead of the 20 per cent.
- Ten-year tax holiday for core sectors of infrastructure such as roads, highways, waterways, water supply, irrigation, sanitation and solid waste management system.
A five tax holiday and 30 per cent deduction for next five years which was available to the telecommunication sector till 31 March 2000 is being reintroduced for units commencing their operations on or before 31 March 2003.
In case of indirect taxes, the Finance Minister has proposed a single rate of 16 per cent of special excise duty. He has proposed to abolish the 8 per cent special excise duty on glazed tiles, mattresses and articles of bedding, carpets & floor coverings, painted canvas, studio back cloth etc., linoleum & textile wall coverings etc., scooters & motorcycles and taxis. These items will now be charged to CENVAT only at the rate of 16 per cent.
- The items that currently attract CENVAT at half the rate i.e., 8 per cent. All these items will henceforth be charged the normal rate of 16 per cent except cotton yarn including sewing thread, LPG, kerosene and diesel engines up to 10 HP.
- The excise duty exemption given to SSIs up to Rs. 1 crore of capital is being withdrawn in cases relating to cotton yarn, ball or roller bearings and arms 7 ammunition for private use.
- On the excise front, the Budget proposals will result in a revenue gain of Rs. 46.77 crore, while on the customs front, there would be a revenue loss of Rs. 2128 crore. The indirect tax revenue for the next year would be about Rs. 1,40,992 crore.
- There is no further reduction in the number of major customs duty rate, which would remain 35 per cent, 25 per cent, 15 per cent and 5 per cent. However, the 10 per cent surcharge is being discontinued to bring the peak level from 38.5 to 35 per cent.
- The customs duty on tea, coffee, copra and coconut has been doubled to 70 per cent.
- For the replenishment of the National Calamity Contingency Fund, the Finance Minister has proposed to levy a surcharge of 15 per cent on cigarettes. The duty on biris is being raised to Rs. 7 per thousand from Rs. 6.The total duty on pan masala would now be 55 and 60 per cent. Miscellaneous tobacco products like chewing tobacco will attract a total duty of 60 per cent.
- The rate basic customs duty on the import of second hand cars, multi utility vehicles, scooters and motorcycles is being raised to 105 per cent, which is three times the peak rate.
- CNG kits and their parts will now attract a low duty of 5 per cent.