M A I N   N E W S

Sinha moves Finance Bill in Lok Sabha
Cut in excise from today
Tribune News Service

NEW DELHI, May 3 — The Union Finance Minister, Mr Yashwant Sinha, today proposed a few changes in direct and indirect taxes, announced a number of customs measures to protect the domestic industry and exempted five items from CENVAT.

Moving the Finance Bill for 2000-2001 in the Lok Sabha to give effect to the taxation proposals, Mr Sinha in a bid to give protection to the domestic industry raised the import duties on tea and coffee from 15 per cent to 35 per cent, on poultry meat and their preparations from 35 per cent to 100 per cent and on non-coking coal from 15 per cent to 25 per cent .

He also announced increase in the additional customs duty on marble slabs and tiles from Rs 30 per square metre to 16 per cent.

A malaria drug, Artemisinin, was also exempt from basic customs duty while it was reduced from 35 per cent to 25 per cent for DBM, fused magnesia and sea water magnesia of certain specifications from 35 per cent to 25 per cent.

Mr Sinha exempted silicon, E-Mal and intravenous fluids, tapioca starch and asafoetida (heeng) from the Central Value Added Tax (CENVAT), besides giving 50 per cent concession to biscuits priced below Rs 5 and weight not exceeding 100 gm.

The Minister said duty free clearance limit of paper made from non-conventional raw materials was being raised from 2500 tonnes to 3500 tonnes.

The changes leading to reduction in excise and customs duties would come into force from tomorrow. Changes in increase in duties and other legislative changes would become operational after the Finance Bill is passed by Parliament and enacted, Mr Sinha said.

On the direct taxes side, the Minister said that the surcharge on non-corporate assessees having income above 1,50,000 would continue to be 15 per cent, but for the purpose of tax deduction at source (TDS) it would only be at 10 per cent to avoid operational complications.

Mr Sinha also proposed to raise the exemption limit of tax at source on non-bank deposits from Rs 2500 to Rs 5,000.

To mitigate the hardships being faced by farmers, Mr Sinha proposed to discontinue TDS on compulsory acquisition of their land.

Mr Sinha also proposed to exempt charitable companies set up not with any profit motive from the operation of Minimum Alternate Tax and extended total exemption for donations to all recognised national sports associations on the lines given to the Indian Olympic Association.

To further promote housing activity, the Minister proposed to raise the limit of deduction of interest payable in acquiring self-occupied properties from Rs 75,000 to Rs one lakh.

Mr Sinha said shares allotted to employees would not be treated as perquisites and would be subject to capital tax only at the time of sale and there would be no tax on distributed or undistributed income of venture capital funds.

To encourage research and development in knowledge-based industries particularly pharma and biotechnology, the weighted deductions for such expenses would be raised from 125 per cent to 150 per cent. These R and D companies would also enjoy tax holiday for ten years. Mr Sinha proposed to set up a fund of Rs 150 crore to be utilised for promoting research and development.

Highlights

• Exempted silicon, e-mail and intravenous fluids, tapioca starch and asafoetida (heeng) from CENVAT.
• Exempted biscuits from 50 per cent of CENVAT, provided MRP not exceeding Rs 5 per packet and less than 100 gm weight.
• Customs duty on tea and coffee increase to 35 per cent.
• Customs duty on poultry meat increased to 100 per cent.
• Customs duty on marble slabs, tiles and non-coking coal increased.
• Limit of investment in infrastructure bonds under Section 88 increased to Rs 20,000 from Rs 10,000.
• Limit of deduction of interest payable in acquiring self-occupied properties from Rs 75,000 to Rs 1 lakh.
• Discontinue of TDS on compulsory acquisition of farmers’ land in view of hardships faced by them.
• Lock-in period for investment in capital gains bonds of NHAI and NABARD reduced to three years from five years.
• Increase in duty free clearance limit of paper made from non-conventional raw materials from 2,500 tonnes to 3,500 tonnes.
• Exempt artemisinin from basic customs duty.