NEW DELHI: Leaving direct taxes untouched except for continuing the income tax surcharge on ‘super-rich’ individuals and corporates, the Interim Budget Monday slashed excise duty on cars and two-wheelers, and capital goods and consumer durables to boost manufacturing and growth.
Presenting the Interim Budget for 2014-15 along with a vote-on-account for spending up to July, Finance Minister P Chidambaram also provided service tax exemption for storage and warehousing of rice like it was done in the case of paddy last year. Also, blood banks have been exempted from its purview.
The 10 per cent surcharge on ‘super-rich’ having income above Rs 1 crore in a year and the up to 5 per cent surcharge on corporates imposed last year will continue.
“In keeping with the conventions I do not propose to make any announcements regarding changes to the tax laws,” he said.
The Budget document does not give figures of the indirect tax concessions, which are valid up to June 30, 2014 and could be reviewed later. They will be notified later.
In a major relief to ex-servicemen, the Minister announced that the government has accepted in-principle their demand for one-rank-one-pay.
The allocation for Defence for the coming year has been enhanced by 10 per cent from Rs 2,03,672 crore in Budget estimate of 2013-14 to Rs 2,24,000 crore in 2014-15.
Non-plan expenditure estimated at Rs 12,07,892 crore. Of this expenditure on food, fertiliser and fuel subsidy will be Rs 2,46,397 crore, which will be slightly more than the revised estimate of Rs 2,45,452 crore in 2013-14.
Giving Budget estimates, the Minister said the current financial year will end on a satisfactory note with the fiscal deficit at 4.6 per cent, below the redline of 4.8 per cent, and the revenue deficit at 3.3 per cent.
The fiscal deficit for 2014-15 has been pegged at 4.1 per cent, which will be below the target of 4.2 per cent set by the new fiscal consolidation path. Revenue deficit is estimated at 3 per cent.
Justifying the excise duty reliefs, Chidambaram said, “The current economic situation demands some interventions that cannot wait for the regular Budget. In particular, the manufacturing sector needs an immediate boost.”
To encourage domestic production of mobile handsets, he restructured the excise duty for all categories fixing it at 6 per cent with CENVAT credit or 1 per cent without CENVAT credit.
Customs duty structure on non-edible grade industrial oils and its fractions, fatty acids and fatty alcohols has been pegged at 7.5 per cent to encourage to domestic production of soaps and oleo chemicals. —PTI