As the nation looks forward to the 2012-13 India Budget to be presented by Finance Minister Pranab Mukherjee on March 16, the key issue that concerns industry players is whether there could be an announcement of excise duty hike from 10 to 12% to augment budgetary resources for the government.
The move has been opposed by the major industry associations, Confederation of Indian Industry (CII), Federation of Indian Chambers of Commerce and Industry (FICCI) and Associated Chambers of Commerce and Industry (ASSOCHAM).
“CII reiterates its recommendation that excise duties should not be raised in the Union Budget. Without yielding any extra revenue for the government, such a step would further hurt the manufacturing sector,” CII director general Chandrajit Banerjee said.
India’s economic growth has slowed down to 6.1% in Q3, 2011-12 on a year-on-year basis due to weak trends in manufacturing and mining output. The nation may miss the earlier forecast of 6.9% GDP growth this year, already down from 8.4% achieved in 2010-11.
According to Jagannadham Thunuguntla, Head of Research at SMC Global Securities, the impact of excise duty hike from 10% to 12% will be uniform across industries- FMCG, textiles, engineering, power, cement.
ASSOCHAM’s Pred-Budget survey of 1000 CEOs has suggested selective increase in customs duty on import of items other than input materials and capital goods, increase duty on finished goods imports and raise budgetary resources through stake sale in public sector undertakings. The Central Sales Tax should be cut from 2% to 1% and Central Value Added Tax (Cenvat) should be restored – credit of input taxes paid on setitng up new manufacturing units, service establishments, on materials and services used in civil construction for installing machinery.
Customs and excise duties on cold chain equipment need to be pegged at five per cent or below to encourage domestic and foreign investments for minimising horticultural wastages and increasing shelf life of products, ASSOCHAM said.
The move has been opposed by the major industry associations, Confederation of Indian Industry (CII), Federation of Indian Chambers of Commerce and Industry (FICCI) and Associated Chambers of Commerce and Industry (ASSOCHAM).
“CII reiterates its recommendation that excise duties should not be raised in the Union Budget. Without yielding any extra revenue for the government, such a step would further hurt the manufacturing sector,” CII director general Chandrajit Banerjee said.
India’s economic growth has slowed down to 6.1% in Q3, 2011-12 on a year-on-year basis due to weak trends in manufacturing and mining output. The nation may miss the earlier forecast of 6.9% GDP growth this year, already down from 8.4% achieved in 2010-11.
According to Jagannadham Thunuguntla, Head of Research at SMC Global Securities, the impact of excise duty hike from 10% to 12% will be uniform across industries- FMCG, textiles, engineering, power, cement.
ASSOCHAM’s Pred-Budget survey of 1000 CEOs has suggested selective increase in customs duty on import of items other than input materials and capital goods, increase duty on finished goods imports and raise budgetary resources through stake sale in public sector undertakings. The Central Sales Tax should be cut from 2% to 1% and Central Value Added Tax (Cenvat) should be restored – credit of input taxes paid on setitng up new manufacturing units, service establishments, on materials and services used in civil construction for installing machinery.
Customs and excise duties on cold chain equipment need to be pegged at five per cent or below to encourage domestic and foreign investments for minimising horticultural wastages and increasing shelf life of products, ASSOCHAM said.
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