Some of the highlights of the Union Budget presented by the Union Finance Minister, Shri Pranab Mukherjee, are :
- A mandatory Excise duty of 10% imposed on ready made garments and textile made ups bearing a brand name or sold under a brand name.
- An excise duty of 5 percent imposed on automatic looms and projectile looms.
- Excise duty is reduced from 10% to 5% on parts of specified textile machinery.
- Excise duty rate of 10% on Man-made fibre textiles remains unchanged.
- Peak rate of customs duty retained at 10%.
- Basic custom duty on raw silk (not thrown) reduced from 30% to 5 percent.
- Basic customs duty reduced from 5% to 2.5% on certain textile intermediates.
- Basic customs duty on certain specified inputs for manufacture of certain technical fibre and yarn reduced from 7.5 percent to 5 percent.
- Cotton waste fully exempted from basic customs duty.
- Basic customs duty on Poly Tetra Methylene Ether Glycol (PTMEG) and Diphenylmethane 4, 4- Diisocyanate (MDI) reduced from 7.5 percent to 5 percent subject to actual user condition.
- Basic Customs duty reduced from 5 percent to 2.5 percent on Acrylonitrile.
- Basic Customs duty reduced from 7.5 percent to 5 percent on Sodium Polyacrylate. Basic Customs reduced from 10% to 7.5 percent on Caprolactum.
- Basic Customs duty reduced from 10% to 7.5% on Nylon chips, fibre & yarn.
- Basic customs duty reduced from 5% to 2.5% on rayon grade wood pulp.
- Service tax rate retained at 10%. Exemption provided to services provided by an organizer of business exhibitions in relation to business exhibitions held outside India. Value of Airfreight included in the assessable value of goods for charging customs duties excluded from taxable value for the purpose of levy of service tax under the “Transport of goods by air service”. Exemption from service tax on membership fees under “Club or association service” given to the associations or chambers representing industry or commerce for the period from 16th June 2005 to 31st March 2008.
- Rs.3100 Crores allocated under the TUF Scheme.
- To quicken the clearance of the cargo by customs and further modernize the customs administration, the Budget has proposed to introduce self-assessment in customs. Under this, importers and exporters will, themselves, assess their duty liabilities while filing their declarations in the EDI system. The department will verify such assessments on a selective system driven basis. Taking into account the fact that there have been considerable difficulties in the sanction of refunds relating to service tax paid on services used for export of goods, the Budget has proposed to shortly introduce a scheme for the refund of these taxes on the lines of duty drawback in a far more simplified and expeditious manner.