The union budget proposals for FY 2010-11 include several taxation related measures including rationalisation, revision and revamp of existing taxation regimes in various sectors. The rate reduction in Central Excise duties is sought to be partially rolled back and the standard rate on all non-petroleum products would be enhanced from 8 per cent to 10 per cent ad valorem. The specific duty rates applicable to Portland cement and cement clinker are being adjusted upwards proportionately while ad valorem component of excise duty on large cars, multi-utility vehicles and sports-utility vehicles reduced under the first stimulus package is being increased 2 per cent points to 22 per cent.
Oil and petro-products
The basic duty on crude petroleum, diesel & petrol and other refined proudcts has been restored at 5 per cent, 7.5 per cent and 10 per cent respectively.
Central Excise duty on petrol and diesel has been revised upward by rupee one per litre on both fuels.
Certain changes in the excise duty structure on cigarettes, cigars and cigarillos have been introduced in addition to increase in rates. Also excise duty on all non-smoking tobaccos including scented tobacco, snuff, chewing tobaco etc has been enhanced.
Cinematography equipment and software
Addressing the investment needs of multi-service operators for adoption of digital technology with ''Digital Head End'' equipment the minister has announced project import status at a concessional customs duty of 5 per cent with full exemption from special additional duty to the initial setting up of such projects.
The budget proposals also seek to provide for scrapping the differential customs duty structure for import of digital masters of films for duplication or distribution in electronic medium and in cinematographic film. The differential duty structure hitherto being charged on the value of the carrier medium would no longer be applicable. The same consideration would apply to music and gaming software imported for duplication and in all such cases, the value representing the transfer of intellectual property rights would be subject to service tax, the finance minister said.
The minister has further sought to grant of project import status to 'Monorail projects for urban transport' at a concessional basic duty of 5 per cent. This would go a long way towards strengthening the public transport system and reducing the dependence on fossil fuels.
To spur road construction activity, the minister allowed re-sale of specified machinery imported under full exemption from import duty for such projects, on re-payment of import duty at depreciated value. The importer would be free to relocate such machinery to other eligible road construction projects, Mukherjee announced.
In a measure to boost the domestic handset industry the proposals seek to extend the exemptions from basic, CVD and special additional duties granted to parts, components and accessories to battery chargers and hands-free headphones to encourage domestic manufacture of such accessories. The exemption from special additional duty stands extended till 31 March 2011.