I propose to reduce the duty on the following articles:
Tooth paste, from 20% to 10%;
Detergents, from 30% to 25%;
Cartons, boxes and bags made of paper and
paperboard, from 20% to 10%;
Glassware produced by semi-automatic process, from
20% to 10%;
Glassware used for table, kitchen etc., from 15%
to 10%;
Articles of asbestos cement, from 25% to 20%; and
Ceramic articles, other than glazed tiles, from
20% to 15%.
I also propose to raise the exemption limit for footwear
from Rs.50 to Rs. 75 per pair.
The rates of excise duty on motor vehicles are not in
consonance with the accepted classification of such vehicles. I
therefore propose the following rationalisation:
Duty on motor cars and other motor vehicles principally
designed to carry not more than six persons, excluding
the driver, will remain unchanged at 40%.
Duty on motor vehicles principally designed to carry
more than 6 persons but not more than 12 persons,
excluding the driver - 20%
Duty on other motor vehicles for transport of persons
or goods - 15%.
There is no change in the duty on two-wheelers or tractors.
If there is one area in which a Finance Minister can
both tax and please, it is cigarettes. Today, however, I shall
please you only in a small way by proposing modest increases in
the specific duties on cigarettes ranging from about 5% to 7[%.
In the case of non-filter cigarettes, not exceeding 60 mm in
length, popularly called mini cigarettes, I propose to raise the
tax by 25% from Rs.60 per thousand to Rs.75 per thousand.
In order to encourage R & D efforts in India I propose to
exempt goods developed and patented in India and concurrently in
specified countries from the levy of excise duty for a period of
three years. I am also rationalising the exemption from customs
duty for import of equipment and consumables for R&D
institutions.
I have proposed the addition of potassium chlorate,
copper powder and cigarette lighters to the list of goods
eligible for duty exemption under the SSI scheme. The reduction
in import duties proposed elsewhere will also substantially
benefit the small scale industries. In order to benefit hundreds
of small scale manufacturers of matches I have decided to
dispense with the physical control system operating on them and
introduce the self- removal procedure freeing them from the day
to day bother of control. I hope SSI match units will respond
with substantial increase in payment of excise duties.
I have proposed rationalisation of rates and exemptions
both in customs and excise in several other areas. I would
not like to take the time of the House by going into these
details.
Our excise procedures are outdated and not in tune with
the times. They need to be modified. They should encourage
voluntary compliance with tax laws by the tax payers. With
effect from 1st October,1996, assessees would no longer be
required to furnish copies of invoices along with the monthly
returns. All that they would be required to furnish to the excise
department will be a simple Return indicating the duty paid on
self- assessment basis. Wherever possible the assessees'
computers could also be linked to the Department's computers for
on line assessment.
I also propose to introduce a scheme of selective audit
by the excise officers and dispense with the existing scheme of
routine examination and checking of returns and documents
furnished by the assessees. This scheme would also come into
force from 1st October, 1996.
I am sure that these changes would be widely welcomed by
the manufacturers who are required to pay excise duties and I
expect them to comply with the laws faithfully. However, I wish
to affirm government's resolve to deal with tax evaders sternly.
I am proposing suitable changes in the Customs and Excise Acts to
provide for mandatory penalty, together with interest, for
evasion of duties on account of fraud, collusion, mis-statement
or suppression of facts. Henceforth, the mandatory penalty for
evasion of duty on these counts shall be equal to the amount of
duty evaded. Tax evaders would also be required to pay interest
starting from the first day of the succeeding month in which the
duty evaded ought to have been paid and also face criminal
prosecution.
