The Indian Budget 1996-97 The Indian Economy Overview

INDIAN FISCAL BUDGET ONLINE


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Taxation [7]



  1. I propose to reduce the duty on the following articles:

  2. I also propose to raise the exemption limit for footwear from Rs.50 to Rs. 75 per pair.

  3. 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:

  4. 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.

  5. 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.

  6. 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.

  7. 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.

  8. Our excise procedures are outdated and not in tune with the times.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.

  9. 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.

  10. 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.
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