Third stimulus: Govt cuts excise, service tax by addl 2%

Finance Minister Pranab Mukherjee today announced an across-the-board cut in excise and service tax rates, as a part of the third stimulus package to boost the domestic economy.In his reply to the interim budget speech, Mukherjee announced a two percentage point cut in service tax rates to 10 per cent.Mukherjee also announced that on goods that attract 10 per cent excise duty will now be charged at 8 per cent. However, excise rates on items that attract 8 per cent and 4 per cent excise duty will not be changed.The cut in excise duty have been extended beyond March 31, 2009. But Mukherjee did not specify the date till which the excise cut has been extended.Excise duty on bulk cement has been fixed at 8 per cent or Rs 290 per tonne.Mukherjee announced that customs duty exemption on Naptha will continue beyond March 31, 2009.