The Hindu Business Line : Chidambaram moves Finance Bill in LS

Looking ahead
Customs duty moving towards Asean levels.
Roadmap on the proposed goods and services tax to be placed before LS soon.
Efforts on to converge excise duty to a single rate.

New Delhi , March 18

The Finance Minister, Mr P. Chidambaram, told the Lok Sabha on Saturday that there was no reason to "tinker and tamper" with direct tax rates year after year and asserted that fiscal 2006-07 would be a year of consolidation for direct taxes.

Moving the Finance Bill, 2006, for the consideration of the House, Mr Chidambaram said the Government has attempted to send a strong message through the Budget that tax rates would be moderate and stable. "The gross tax revenues of the Central Government are going up by 20 per cent every year, which means that our tax policies are right. We must ensure that this growth momentum is maintained," he said.

Indirect tax

On the indirect taxes front, Mr Chidambaram said the direction on the customs duty side was to move towards Asean levels.

"We have taken a half-step this year and brought down the peak rate to 12.5 per cent. Our goal is to have customs duties between 5-10 per cent comparable to the Asean countries," he said. He also promised to bring before the Lok Sabha a roadmap for the proposed goods and services tax (GST), which is to be introduced from April 1, 2010. "We have allowed ourselves four years to move to GST. I will come to the House with a roadmap after consultations with State Finance Ministers," he said.

On the excise front, the Finance Minister said that efforts were being taken to converge the excise duty rate to a rate and indicated that the convergence level was broadly between 14-16 per cent. At the same time, he also acknowledged that there were exceptions and excise duty rates have been reduced in select identified industries to give a boost to their fortunes.

"Last year, this House gave a new lease of life for the cotton industry. This year, we have reduced the excise duty on man made fibres to give a boost to this industry," he said, adding that excise duty reductions or exemptions have been accorded to give a fillip to the leather and food processing industries.