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

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anthony

Finance

2681 Points Posted on 24 February 2009

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.

Replies (4)

Onkar Singh

Service

43 Points Posted on 24 February 2009

From what date the new rates i.e 10% instead of 12% will be applicable.

Prateek

Director

31 Points Posted on 24 February 2009

Most probally - effective tonight

S. Banerjee

Practising Cost Accountant. Core area- C

632 Points Posted on 25 February 2009

Mr. Anthony,

You have rightly pointed out. I have some doubt on this announcement i.e. whether this 2% cut on Central Excise duty is for this financial year only or not. As the FM announced separately " Four per cent excise cut announced earlier in the stimulus package in December will continue beyond 31st March".

Usually all the Notifictions are valid upto 31st March unless the same has been notified again. Then what was the necessity for this announcement separately?

Welcome the opinion of the experts.

Thanks in advance,

S. Banerjee