| Singh: Freebies all the way
New Delhi, April 30: Ruling out the imposition of agricultural income tax, finance minister Jaswant Singh today announced tax sops for edible oil and textiles industries and provided income tax deduction of Rs 75,000 for professional earnings of sportspersons.
Winding up a four-day discussion on Finance Bill, 2003, in the Lok Sabha, he announced a number of changes in the tax proposals but remained silent on the revenue implications of today’s amendments.
Singh also announced that tax would not be deducted at source on interest awarded on accident compensation up to Rs 50,000. He said service tax would be extended to new services about which details would be announced later but Jammu and Kashmir would not come under its net.
Bowing to the demand of the members, Singh announced waiver of interest on farm credit in 14 states declared as drought affected. He proposed to exempt from tax income earned on life insurance policies taken before April 1 this year. In his budget speech he had proposed to withdraw this relief in respect of insurance policies whose premium exceeded 20 per cent of the sum assured in any of the years.
The finance minister’s concessions covered hand pumps which will be fully exempted from excise duty. He reduced excise duty by half to 8 per cent on tiles manufactured by units not using electricity or petroleum fuels.
He accepted the demand of industries in special economic zones for reinvestment allowance of 50 per cent of the profits ploughed back in business and provided 100 per cent tax exemption to offshore banking units in SEZs for three years and 50 per cent exemption for the subsequent two years.
Singh, however, rejected the tea industry’s demand for removal of one-rupee cess on tea and extended certain benefits given to tea industry to rubber industry as well.
Bowing to the demand of the edible oil industry, Singh replaced the 8 per cent ad valorem duty on branded and packed refined edible oil and vanaspati by a specific rate of Re 1 per kg on refined edible oils and Rs 1.25 per kg on vanaspati.
Simultaneously, he also removed high duty differential between imported refined palm oil and crude palm oil by reducing customs duty on RBD palm oil from 85 per cent to 70 per cent.
In addition, such refined palm oil would also be exempted from special additional duty which is an additional reduction of about 5 per cent.
Singh was confident that these proposals would have a sobering effect on domestic edible oil prices.