Key Features of Budget 2013-2014 - INDIRECT TAXES

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1.      No change in the normal rates of 12 percent for excise duty and service tax.

2.      No change in the peak rate of basic customs duty of 10 perent for non-agricultural products.

 

Customs

 

1.      Period of concession available for specified part of electric and hybrid vehicles extended upto 31 March 2015.

2.      Duty on specified machinery for manufacture of leather and leather goods including footwear reduced from 7.5 to 5 percent.

3.      Duty on pre-forms precious and semi-precious stones reduced from 10 to 2 perent.

4.      Export duty on de-oiled rice bran oil cake withdrawn.

5.      Duty of 10 percent on export of unprocessed ilmenite and 5 percent on export on ungraded ilmenite.

6.      Concessions to air craft maintenaince, repair and overhaul (MRO) industry.

7.      Duty on Set Top Boxes increased from 5 to10 percent.

8.      Duty on raw silk increased from 5 to 15 percent.

9.      Duties on Steam Coal and Bituminous Coal equalised and 2 percent custom duty and 2 percent CVD levied on both kinds coal.

10.  Duty on imported luxury goods such as high end motor vehicles, motor cycles, yachts and similar vessels increased.

11.  Duty free gold limit increased to ` 50,000 in case of male passenger and `1,00,000 in case of a female passenger subject to conditions.

 

Excise duty

1.      Relief to readymade garment industry. In case of cotton, zero excise duty at fibre stage also. In case of spun yarn made of man made fibre, duty of 12 percent at the fibre stage.

2.      Handmade carpets and textile floor coverings of coir and jute totally exempted from excise duty.

3.      To provide relief to ship building industry, ships and vessels exempted from excise duty. No CVD on imported ships and vessels.

4.      Specific excise duty on cigarettes increased by about 18 percent. Similar increase on cigars, cheroots and cigarillos.

5.      Excise duty on SUVs increased from 27 to 30 percent. Not applicable for SUVs registered as taxies.

6.      Excise duty on marble increased from `30 per square meter to `60 per square meter.

7.      Proposals to levy 4 percent excise duty on silver manufactured from smelting zinc or lead.

8.      Duty on mobile phones priced at more than ` 2,000 raised to 6 percent.

9.      MRP based assessment in respect of branded medicaments of Ayurveda, Unani, Siddha, Homeopathy and bio-chemic systems of medicine to reduce valuation disputes.

 

Service Tax

1.      Maintain stability in tax regime.

2.      Vocational courses offered by institutes affiliated to the State Council of Vocational Training and testing activities in relation to agricultural produce also included in the negative list for service tax.

3.      Exemption of Service Tax on copyright on cinematography limited to films exhibited in cinema halls.

4.      Proposals to levy Service Tax on all air conditioned restaurant.

5.      For homes and flats with a carpet area of 2,000 sq.ft. or more or of a value of ` 1 crore or more, which are high-end constructions, where the component of services is greater, rate of abatement reduced from from 75 to 70 percent.

6.      Out of nearly 17 lakh registered assesses under Service Tax only 7 lakhs file returns regularly. Need to motivate them to file returns and pay tax dues. A onetime scheme called ‘Voluntary Compliance Encouragement Scheme’ proposed to be introduced. Defaulter may avail of the scheme on condition that he files truthful declaration of Service Tax dues since 1st October 2007.

7.      Tax proposals on Direct Taxes side estimated to yield to `13,300 crore and on the Indirect Tax side `4,700 crore.

 

Good and Services Tax

1.      A sum of ` 9,000 crore towards the first instalment of the balance of CST compensation provided in the budget.

2.       Work on draft GST Constitutional amendment bill and GST law expected to be taken forward.