NEW DELHI : As part of “Make in India” drive of Prime Minister Narendra Modi, Finance Minister Arun Jaitley has tweaked customs and central excise duties on nearly three dozen items in the last-minute amendments brought in the Finance Bill just hours before its passage in the Lok Sabha Thursday evening, claiming it will make the Indian manufacturing more competitive.
Effect of the changes could not be ascertained as a bundle of official amendments were circulated to the MPs only Thursday morning and remained in accessible to the media except for the amendments related to the direct taxes.
While piloting the Finance Bill, Jaitley, however, stated that he has reduced excise duty on eight items and rationalised in case of two others while the customs duty has been either reduced or rationalised for 14 items and changes have been effected in case of eight items having an inverted duty structure where manufacturer paid larger input duties than the duties imposed on the finished products.
A small relief he provided through amendment in the Income Tax Act is to double the exempted transport allowance from Rs 800 per month to Rs 1600 per month, which amounts to a total deduction of Rs 19,200 in a year. He has also provided additional tax benefit to the middle class by raising the exemption for health insurance by Rs 10,000 in each category, because of which the relief of Rs 15,000 is increased to Rs 25,000 and Rs 20,000 becomes Rs 30,000. It covers individuals and their family member.
Jaitley also exempted from service tax on insurance under the PM”s Jan Dhan Yojana as also on two new insurance schemes to be launched by Modi from Kolkata on May 9 — Pradhan Mantri Jeevan Jyoti Bima Yojana and Pradhan Mantri Suraksha Bima Yojana — and on the funds collected by the agencies under the Atal Bima Yojana for pension to the unorganised sector workers.
The taxpayers can get additional deduction up to Rs 50,000 under Section 80C of the I-T Act for investment in the Sukanya Samridhi Yojana for helping out the girl child.
Jaitley also withdrew the central excise duty exemption enjoyed all these years by the defence public sector undertakings and the ordnance factories, claiming that it will provide a level-playing field to the domestic manufacturers in the private sector encouraged to enter the defence production. For the same purpose, he also withdrew exemption from additional customs duty, CVD and SAD on the defence imports, though retaining exemption from the basic custom duty. These changes take place from June 1.
Some of the changes in customs duties include cut in duty on raw silk from 15 to 10 per cent to help out the weavers and increase of the basic customs duty on natural rubber from 20 per cent to 25 per cent.