New Delhi: The government on Monday retained the broad rate structure for all indirect taxes, which will dent its kitty under this head by 16.11% this fiscal compared to projections a year ago.
The government’s collection from indirect taxes is pegged at Rs2.69 lakh crore for this fiscal, a way down from the Rs3.21 lakh crore Budget Estimate for 2008-09.
This is despite the fact that the net of service tax has been expanded, excise duty on some goods like LPG, nylon and yarn raised from 4% to 8% and customs duty imposed on set-top boxes which would give an additional Rs2,000 crore.
The government realised a low indirect tax revenue at around Rs2.81 lakh crore in 2008-09 against budget estimates of Rs3.21 lakh crore.
Only service tax target of Rs65,000 crore, pegged in the revised estimates for 2008-09, is retained in the full Budget presented today, which is higher by Rs540 crore than projected in budget estimates for the last fiscal.
Both customs duty and excise duty collection targets for the current fiscal are less than projected for last fiscal, both in revised estimates and budget estimates.
Customs duty collections are projected to be down over 17% at Rs98,000 crore during the current fiscal against Rs1,18,930 crore in Budget estimates, and over nine per cent lower than Rs1,08,000 crore in revised estimates.
The Government is expected to garner 22.77% less revenue from excise duty at Rs1,06,477 crore this fiscal against Rs1,37,874 crore in budget estimates and 1.73% less than Rs1,08,359 crore in the revised estimates for 2008-09.
It is the excise duty which bore the maximum brunt of stimulus packages. It was cut by 6% to 8% while service tax was cut by two per cent to 10%.
While retaining these duty structures, finance minister Pranab Mukherjee increased excise duty on some products by four per cent to eight per cent to bring harmony in the tax structure. However, food items like biscuits, sherbats, cakes and pastries, medical equipment, pressure cookers could continue to attract 4% tax rates.
The Minister also expanded the list of service duty to include services provided by legal consultants, though the individual service provider is exempted. Also, goods carried by railways, coastal cargo or inland waterways will also draw service tax.
Mukherjee also imposed 5% customs duty on set top boxes. He increased customs duty on gold and silver, excluding jewelery.