Parliament passes Interim Budget; reduces excise duty, servi

Giving relief to the industry reeling under the impact of slowdown, the Government on Tuesday reduced by two per cent rates of excise duty and service tax. While the general excise duty has been reduced from 10 per cent to 8 per cent, the rate of service tax cut from 12 per cent to 10 per cent. Four per cent excise cut announced earlier in the stimulus package in December will continue beyond 31st March, Finance Minister Pranab Mukherjee said while winding up the debate on the Interim Budget in the Lok Sabha on Tuesday. The Lok Sabha later approved the Interim Budget by voice vote, amidst a walkout by the Opposition BJP and erstwhile supporters Left parties. Mukherjee further said that duty on bulk cement has been reduced from 10 per cent to 8 per cent. Govt reduces excise duty, service tax by 2 pc Giving relief to the industry reeling under the impact of slowdown, the Government has reduced by two percent rates of excise duty and service tax. While the general excise duty has been reduced from 10 percent to 8 percent, the rate of service tax cut from 12 percent to 10 percent. Four percent excise cut announced earlier in the stimulus package in December will continue beyond 31st March, Finance Minister Pranab Mukherjee said while winding up the debate on the Interim Budget in the Lok Sabha on Tuesday. The Lok Sabha later approved the Interim Budget by voice vote, amidst a walkout by the Opposition BJP and erstwhile supporters Left parties. Mukherjee further said that duty on bulk cement has been reduced from 10 percent to 8 percent. Mukherjee further said that excise duty on bulk cement which was 10 percent (or Rs 290 per tonne, whichever is higher) has been reduced to 8 percent (or Rs 230). The duty concession on naphtha for production of power sector, he said, will continue beyond 31st March 2009. The anomalies faced by suppliers to Special Economic Zone with regard to treatment of export profits will be addressed in the regular budget, he said. As regards the states, Mukherjee said as part of the stimulus package they have been allowed to borrow an additional 0.5 percent of the Gross State Domestic Product (GSDP). The exemption, he added, will continue in the next fiscal. Brushing aside the criticism that government had not done enough for the industry, Mukherjee said it was important to stick to Parliamentary norms and constitutional propriety at a time when the term of the present government was about to end. "It is not possible for me to indulge into financial profligacy without adequate resources", he said. However, he added, different measures taken by the government and the Reserve Bank must be given time to have an impact on the economy. Enough liquidity has been pumped into the system to allow banks to adjust their interest rates, he said. Since September, RBI has injected about Rs 4 lakh crore into the system and reduced various key policy rates following which several banks have started reducing interest rates.