Government revises Excise and Customs Duty Rates

To provide a fiscal stimulus to the economy through stimulation of demand and relief to the manufacturing sector, Government has carried out certain changes in Excise and Customs duty rates.

Central Excise

The three major ad valorem rates of Central Excise duty viz. 14%, 12% and 8% applicable to non-petroleum products have been reduced by 4 percentage points each. The revised rates will be 10%, 8% and 4% respectively.

Cars, other than small cars, attract composite rates – that are a combination of specific and ad valorem rates. The rates applicable hitherto were '24% + Rs.15,000/-' per unit for cars of engine capacity 1500 cc to 1999 cc and '24% + Rs.20,000/-' per unit for cars of engine capacity of 2000 cc or more. The ad valorem component of these rates has been reduced from 24% to 20%.

In the case of cement, which attracts either the ad valorem rate of 12% or specific rates (Rs./metric tonne) depending upon the retail sale price, the specific rates have also been reduced in the same proportion as the ad valorem rate. Further, the concessional rates for cement produced by mini-cement plants have also been reduced proportionately. Bulk cement would now be chargeable to either 10% ad valorem or Rs.280/- per tonne, whichever is higher.

The rate of duty on cotton textiles and textile articles has been reduced from 4% to Nil. No change has been made in the excise duty rates on petroleum products, specific rated items and tobacco products.

Customs duty

To provide relief to the power sector, naphtha imported for generation of electric energy has been fully exempted from basic customs duty. This exemption will be available upto 31.03.2009.

Export duty on iron ores

The export duty of 8% on iron ore fines has been withdrawn while the rate of export duty on iron ore lumps has been reduced from 15% to 5% ad valorem.

Source : Press Information Bureau

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