The Hindu Business Line : Panel set up on abatement for excise, service tax

THE Finance Ministry on Tuesday appointed a committee to advise the Government on the quantum of abatement that could be granted to specified goods and services for the levy of excise duty and service tax.

The Committee has been formed consequent to the Finance Minister, Mr P. Chidambaram's assurance in his Budget speech this year that an advisory committee would be set up to advise the Government on abatement for excise duty and service tax.

While Member (central excise) of the Central Board of Excise and Customs (CBEC) has been appointed as the Chairperson of the abatement committee, the CBEC Member (Service Tax) would be the co-chairperson.

Additional Chief Adviser (cost), Department of Expenditure in the Finance Ministry has been appointed as Member of the committee and Joint Secretary (Tax Research Unit) would be the Member Secretary of this committee, an official release said.

The committee has been empowered to co-opt officers from other concerned ministries/departments of the Government and also invite experts and representatives from trade and industry as special invitees.

Section 4A of the Central Excise Act 1944 empowers the Central Government to notify certain excisable goods, subjected to ad-valorem levy, on which the excise duty is to be assessed with reference to their retail sale price (RSP). In such cases, the assessable value is arrived at after deducting the notified percentage of abatement from the RSP.

The quantum of abatement is notified by taking into account the amount of excise duty, sales tax and other taxes and trade margins. In case of certain taxable services, specified abatements from gross value are prescribed to arrive at the assessable value on which service tax is charged.

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