Excise duty may go up, direct tax code unlikely

Budget session starts today; rail budget on Feb 24, general budget on Feb 26

PTI | February 22, 2010


Budget session gets going today
Budget session gets going today

Finance Minister Pranab Mukherjee will present Budget 2011 on Friday, amid speculation that excise duty may be raised as part of a partial rollback of the stimulus measures.

However, direct tax rates are not likely to be tweaked for the time being as the finance ministry is unlikely to initiate reforms on the direct taxes code now, sources said.

The direct taxes code seeks replace the archaic Income Tax Act. However, the DTC bill is unlikely to come in the budget session, as it is still being debated at various government levels, the sources added. The budget session begins on Monday.

The Prime Minister's Economic Advisory Council had also pitched for raising of excise duty to the level of service tax and broadening the service tax net. Currently excise duty stands at 8 percent and service tax at 10 percent.

After the Central Statistical Organisation estimated economic growth at 7.2 percent for this fiscal against 6.7 percent a year ago, Planning Commission Deputy Chairman Montek Sigh Ahluwalia had also said, "we should say stimulus has succeeded and we should begin to phase it now."

Commerce and Industry Minister Anand Sharma had also said those export sectors which moved into a very robust growth level could stand to see stimulus withdrawn.

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