Relief in Excise Duty to Redymade Garment Industry, Handmade Carpets, Ship Building Industry

To provide a lifeline to the distressed readymade garment industry, the Finance Minister has accepted the demand to restore the 'zero excise duty route' for cotton and spun yarn sector at the yarn, fabric and garment stages. In the case of cotton there will be zero duty at the fiber stage also; and, in the case of spun yarn, there will be a duty of 12% at the fiber stage. In the Budget 2013-14, Shri Chidambaram announced that 'zero excise duty route' will be in addition to the already available CENVAT route.

He also proposed to totally withdraw excise duty from handmade carpets and textile floor coverings of coir or jute. Extending the relief to ship building industry also, Shri P. Chidambaram proposed to exempt ships and vessels from excise duty. Consequently, there will be no CVD on imported ships and vessels.

On the other hand, to gather resources the Finance Minister has proposed to increase the specific excise duty on cigarettes by about 18%. Similar increases are also proposed on cigars, cheroots and cigarillos. Shri Chidambaram has also proposed a 3% increase in the excise duty on SUVs so that the duty on them will go up from 27% to 30%. However, such an increase will NOT apply to SUVs registered as taxis.

Expensive mobile phones i.e. mobile phones which are priced at more than Rs. 2000 will also have to bear higher excise duty of 6%. However, mobile phones which are not more than Rs. 2000 will continue to be levied a concessional excise duty of only 1%.

Rationalizing the excise duty rate for marble, which was fixed way back in 1996, the Finance Minister has proposed to increase the duty from Rs. 30 per sq mt. to Rs. 60 per sq mt.

The excise duty on silver manufactured from smelting zinc or lead has been brought at par with the excise duty applicable to silver obtained from copper ores and concentrates. Thus, now such silver will bear a duty of 4%.

To reduce valuation disputes with regard to branded medicaments of Ayurveda, Unani, Siddha, Homeopathy and Bio-Chemic systems of medicine, the Finance Minister has proposed to use the MRP based assessment. An abatement of 35% will be provided to such branded medicaments.

Source : Equity Bulls

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