Indirect Taxes: Revenue Deptt To Submit Views On Kelkar Paper Soon

New Delhi, October 30: | Updated: Oct 31 2002, 05:30am hrs
The revenue department will soon submit its views on the recommendations of the taskforce on indirect taxes.

Revenue secretary CS Rao told FE that the department will give its inputs before finalisation of the report by the taskforce.

The taskforce headed by adviser to the finance minister, Vijay Kelkar, made its consultation paper public on Tuesday to obtain feedback on the recommendations from various quarters.

The revenue departments feedback would help the taskforce weigh pros and cons of the recommendations before concretising the final report.

When pointed out that most of the suggestions made by the panel in the consultation paper have already been talked about, especially on customs and excise duty rates, Mr Rao said that recommendations of the taskforce are reiteration of the government stance on these issues.

He, however, added that a final view on the suggestions of the taskforce will be taken during the Budget-making process for 2003-04.

The taskforce in its consultation paper has suggested two-tier customs duty structure 10 per cent for raw materials, inputs and intermediate goods and 20 per cent for finished goods. It has recommended zero per cent import duty rate for life saving drugs and government imports for certain key areas, and 150 per cent for specified agriculture produce and demerit goods.

In case of excise, the taskforce has suggested zero per cent rate for life-saving drugs and security-related items, 8 per cent for food products, separate rates for agriculture products and tobacco and tobacco-related products, and 16 per cent rate for all other items.

The taskforce has also suggested certain procedural simplifications including replacem- ent of fortnightly payment of excise duty by monthly payment and doing away with the Budget day restrictions.

Mr Rao stressed that the recommendations of the panel on procedural simplifications are very important and will help in making the indirect tax structure taxpayer-friendly.

The revenue secretary said that tax mop-up in the current financial year is witnessing a good performance as compared to 2001-02, and is set to improve further in the coming months of the fiscal. He added that the finance ministry will review the performance soon and will take steps to improve tax realisation in the areas which are not doing well. Mr Rao said that personal income tax is an area of concern.

On the petroleum ministrys proposal of further rationalisation of duty structure for petroleum products in view of the high international crude oil prices, he said, we will have to take an overall view if there is an impact on revenue.