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Indian Budget 2002-2003>  Key Highlights

Indirect Taxation

· Total indirect tax collection estimated at Rs. 1,43,702 crore.

Excise

· 16 per cent special excise duty abolished on a number of items.

· LPG, kerosene, auto CNG and diesel engines upto 10 HP will now attract CENVAT rate of 16 per cent.

· Excise duty at a moderate rate of 4 per cent on a few items imposed last year increased to 8 per cent. Excise duty at 4 per cent imposed on a few more items, which have remained exempted so far.

· Cigars, cheroots and cigarillos of tobacco or tobacco substitutes shall attract 16 per cent CENVAT.

· Changes in the duty structure of petroleum products. Cess on indigenous crude oil increased from Rs. 900 per metric tonne to Rs. 1,800 per metric tonne. Ad valorem rate of excise duty applicable to motor spirit reduced from 90 per cent to 32 per cent. However, a surcharge of six rupees per litre imposed. The surcharge on ethanol doped motor spirit to be only Rs. 5.25 per litre. · Special incentives for the textile industry.

· Refineries in the North Eastern region to be charged to excise duty at half of the normal rates of excise duty.

· Air travel to and from North East States exempted from Inland Air Travel Tax.

· Excise duty on tea reduced from Rs 2 per kg to Re.1 per kg.

· Specified anti-AIDS drugs exempted from excise duty.

· Three more equipment items added to the list of specified cold chain equipment exempt from excise duty.

· Excise duty exemption scheme withdrawn for granite in the small-scale sector.

· The scheme of excise duty assessment extended to 9 more categories of items this year, raising the number to 92 categories of items.

· Service tax extended to new sectors.

· Service tax exemption on the services provided by hotels extended upto 31st March 2003.

Customs

· By the year 2004-05 only two basic rates of customs duties, viz., 10 per cent covering generally raw materials, intermediates and components and 20 per cent generally covering final products. Peak rate reduced from 35 to 30 per cent this year.

· Customs duty reduced by 10 per cent on a number of refractory raw materials · Basic customs duty on seconds and defectives of steel increased to the bound rate of 40 per cent.

· Customs duty on copper, zinc and lead reduced from 35 per cent to 25 per cent and on aluminium and tin from 25 per cent to 15 per cent.

· Special Economic Zone would be entitled to procure duty free equipment, raw materials, components, etc.

· Customs duty on specified equipment for Ports and Airports reduced to 10 per cent.

· Exemption to aeroplanes, helicopters, gliders, simulators of aeroplanes and their parts and raw materials.

· Zero duty regime on IT products made effective from 2005. Customs duty on a number of hardware inputs reduced to 5 per cent and on certain capital goods to 15 per cent. The duty on certain IT items to be reduced to 10 per cent or 5 per cent as per the WTO binding.

· Cellular phones and pagers exempted from CVD; basic customs duty increased from 5 per cent to 10 per cent.

· Customs duty on tea and coffee increased to 100 per cent and on natural rubber, poppy seeds, pepper, cloves and cardamom to 70 per cent and pulses to 10 per cent.

· Customs duty on agricultural machinery and implements reduced from 25 per cent to 15 per cent.

· Eight more drugs used for treatment of cancer and some other critical diseases included in the list of fully exempted drugs.

· Customs duty on Glucometers and test strips reduced from 25 per cent to 10 per cent.

· Customs duty on non-PDS kerosene reduced from 35 per cent to 20 per cent and increased from 5 per cent to 10 per cent on kerosene sold under the PDS scheme.

· Customs duty on certain earth station equipment and studio equipment reduced from 35 per cent to 25 per cent.

· Customs duty on cement and clinkers reduced from 25 per cent to 20 per cent.

· Customs duty on certain items of personal use for passengers returning from abroad on transfer of residence reduced to 30 per cent. Overall limit of value of the items permissible under this scheme raised from Rs 1.5 lakh to Rs 5 lakh.

· A nominal customs duty of 5 per cent on some of the items that are exempt at present. Special additional duty on certain other items that are currently subjected to 5 per cent customs duty.

· In the next two years CENVAT to be reduced to one rate only, namely 16 per cent.

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