Submission of Kelkar report on indirect taxes postponed

New Delhi: The Kelkar Committee on Indirect Taxes, which was scheduled to submit its final report to the government today, is now expected to be submitted tomorrow, along with the final report on Direct Taxes. The postponement has occurred to due to Finance Minister Jaswant Singh being indisposed.

The final report is expected to recommend a lower excise duty on food products compared to the 8-per cent suggested in the consultation paper on all food products, which currently enjoy duty exemption, according to officials.

If the government accepts the recommendation of a specific duty on petrol and HSD instead of the ad valorem duty rate now being levied, it would be to the benefit of consumers as the existing ad valorem duty structure takes into account the global price fluctuation for the end-user.

In the case of car manufacturers, the committee may cut the existing duty rate from 32 per cent to 20 per cent in a span of three years. According to officials, the rate would stay at 20 per cent from 2005-06 onwards. It would not be reduced to 16 per cent in 2006-07 as proposed in the consultation paper, the officials said.