New Delhi: Tooth powder, lantern, tyre, mosquito net, pen, pencil, sharpner, blade, instrument box for students, pressure cooker, bicycle, cameras and personal computers are set to become dearer as the government intends to withdraw excise and customs duty exemptions on 65 items.
As part of ongoing indirect tax reforms, government has recently circulated a list of 54 items exempted from excise duty and 21 items exempted from customs duty to seek public opinion on their withdrawal.
The finance ministry has asked industry to provide a rationale for continuation of exemptions on these items by June 10, 2006.
"If there are other exemptions that merit withdrawal but are not listed herein, the same may also be mentioned along with the rationale for their withdrawal," an official release stated.
The Revenue Department, which has circulated the lists, has given two months time for response after which it will take a decision on their withdrawal.
Among the 54 items on which the government mulls to lift excise duty exemptions include tooth powder, lantern, tyre, mosquito net, instrument box for students, pressure cooker, bicycle pump, pen, pencil, sharpner and blades.
The government also proposes to withdraw customs duty exemptions on 21 items. It includes television camera, audio recording equipment, video machine, various types of camera, personal computer, type writer and fax machine that are now allowed to be imported duty free by professional journalists.
As customs and excise duty exemptions are provided through official notifications, their withdrawals need not require Parliamentary approval and could be done through a notification.
According to official estimate, Rs 1,58,661 crore was lost due to various direct and indirect tax exemptions in 2004-05.
The excise duty exemptions alone cost the exchequer Rs 30,000 crore, while that of customs duty Rs 92,561 crore. These figures included tax sops given to exporters.
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