The Hindu Business Line : Service tax exemption for farm income insurance premium

THE Finance Minister, Mr P. Chidambaram, has proposed a service tax exemption on the premium paid under the farm income insurance scheme. The Ministry of Agriculture had in 2003-04 introduced the farm income insurance scheme with the objective of income stabilisation of the farmers growing paddy and wheat.

"I observe that the premium under similar schemes namely National Agricultural Insurance scheme is already exempt from service tax. Hence, I propose to exempt the premium under the farm income insurance scheme also from service tax," Mr Chidambaram said in his reply to a debate on the Finance Bill 2005 in the Lok Sabha on Monday.

On the excise duty front, Mr Chidambaram announced an increase in the optional excise duty on nylon tyre cord fabric (above 840 deniers) from 8 per cent to 16 per cent.

"The tyre cord fabric industry had represented that they are not able to fully utilise the credit of duty paid on their inputs on their output. While nylon tyre cord fabric attracted 8 per cent excise duty, its raw material nylon attracted 16 per cent excise duty. To remove this anomaly in excise duty structure, I propose to raise the optional excise duty from 8 per cent to 16 per cent on NTCF (above 840 deniers)," Mr Chidambaram said.

To encourage mechanised vessels and deep-sea trawlers to adopt modern technology for scientific exploitation of marine resources in an eco-friendly manner, the Finance Minister has proposed a reduction in customs duty on mono filament long line system for tuna fishing from 15 per cent to 5 per cent. These would also be exempted from countervailing duty by way of exemption from excise duty, he said.

The Finance Minister also announced a reduction in excise duty on isolated soya protein from 16 per cent to 8 per cent.

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