Business & Economy

Budget may fix excise at
16 pc, hike service tax 

What is India News Service, Friday, 7 February 2005, 1800 hrs IST


The finance ministry is considering bringing the majority of items to the median rate of 16 per cent as part of excise reforms. It is also planning to increase the service tax to 12 per cent from 10 per cent now. 

While exemptions would be curtailed to remove the distortions in the excise duty structure, items falling in the 24 per cent and 8 per cent slabs should be covered under the Cenvat rate of 16 per cent, ministry officials said. 

The officials, however, said discussions were under way and a final view was yet to be taken. “We have to consider the revenue implications. But the general approach is to have a downward revision,” an official said. 

On service tax, some North Block officials were of the view that it may be difficult for the government to increase the rate immediately as the last revision, from 8 per cent, was undertaken in July 2004. 

In case the ministry decides to go ahead with the rate increase, a threshold turnover for exemption from payment of service tax could be considered. 

Though a cut in the peak rate could increase the pressure on the treasury, there was also a view that lower tax slabs would increase compliance and, thereby, revenue. 

Excise has been a cause of concern for the government this fiscal year with a shortfall of around Rs 6,000-7,000 crore from the budgeted estimate of Rs 1,09,199 crore. 

Panel recommends observations can be part of disclosure norms: The Sebi-appointed standing committee on disclosures, headed by Yezdi H. Malegam, has recommended that a number of the “standard observations”, which are issued by the regulator in response to draft offer documents be made a part of the Disclosure and Investor Protection guidelines, 2000.

Finmin seeks dividend from PSUs: Asking profit-making PSUs to pay interim dividends, the finance ministry has said all ministries must ensure that their spendings do not exceed 33 per cent of the budgeted amount.

Subsidy cut in Budget worries fertiliser industry: Amid the government’s move to curtail mounting subsidy bill in the coming Budget, the fertiliser industry is apprehensive that in its enthusiasm to bring down fiscal deficit, the Finance Minister will bring down subsidy on fertilisers without considering other measures. 

Re meets fiscal deficit, $ buys India Inc pie: FIIs poured Rs 38,218 cr into the equity markets in 2004. 

Wipro enters North with soap unit at Baddi: In a bid to scale up its fast moving consumer goods (FMCG) business, Bangalore-based Wipro today set its foot in North India by starting its toilet soap manufacturing unit here. 

More seats, new courses at IIMs: To broadbase their activities in sync with the changing economy, the Indian Institutes of Management are planning new course.

Budget hopes to drive market rally: With the Union budget only three weeks away, the market is expected to remain volatile in the coming days as a host pre-budget leaks and expectations are set to send the stocks through a roller-coaster ride. 
 
Will FM present another dream budget?: There is an air of optimism in industry and stock market circles, as it is confidently anticipated that the forthcoming budget will provide a new lead to the economy and the growth in the Gross Domestic Product (GDP) may be higher at 8-10 per cent on a sustainable basis in the coming years. 

Stocks end on a promising note: Helped BY heavy renewed purchases by foreign institutional investors and selective buying by domestic funds and operators, the sensitive index shot up by 199 points and crossed the 6600-mark.

 
Business papers 


Business Standard
Economic Times
Business Line
Financial Express