Budget 2007-08 – Running Commentary

Tax proposals

Gross Tax revenues have grown by 20% last year. Tax GDP ratio at 11%.

Customs Duty

Peak rate for non agri products reduced to 12.5 to 10%. Chemicals down to 7.5%.

Fully exempt coking coal, regardless of ash content. Gem and jewelry reduced to 3%.

Irrigation equipment reduced to 5%. Medical equipment reduced to 5%.

Import duty of 3% on private aircraft. CVD and additional customs duty also applicable.

No change in general CENVAT rate or service tax rate.

Biodiesel fully exempt from exise duty.

Water purification devices fully exempt.

Cement excise duty reduced to 350 / metric ton only for cement sold at a price of Rs. 190.

Excise duty on cigarettes increased by 5%. Excise duty on beedis applied.

Exemption increased from 4 lakh to 8 lakh for small service providers.

Service tax on services involved in a Works Contract.

Technology business incubators to be exempt from service tax.

Clinical drug trials exempt. Telecom content providers exempt.

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