Financial Daily from THE HINDU group of publications
Sunday, Dec 01, 2002
Financial Daily from THE HINDU group of publications Sunday, Dec 01, 2002 |
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Excise and Customs Agri-Biz & Commodities - Excise and Customs Additional excise duty on sugar, tobacco may go Our Bureau
NEW DELHI, Nov. 30. THE Finance Ministry is set to accept the recommendation of the Kelkar panel for dispensing with the Additional Excise Duty (AED) on sugar, textiles and tobacaco imposed in lieu of sales tax. States would, instead, be allowed to tax AED items after switching over to the value added tax regime from April 1, 2003. The abolition of AED on these three items is expected to enable smoother transition into a national VAT. An indication that States are likely to be permitted to levy VAT on AED items was given by Dr Asim Dasgupta, Chairman of the Empowered Committee of State Finance Ministers here. The Finance Secretary, Mr Dr S. Narayan, has convened a meeting early next week to take a final view on the issue, said a senior Finance Ministry official. The focus of the discussions would be on the repeal of the AED Act 1957 and its revenue implications on the exchequer. States would also be given "sufficient" time to levy VAT on these items, the official said. The committee has already forwarded a draft text of the proposed amendments to the AED Act 1957. The scheme of levy of AED in lieu of sales tax on sugar, tobacco and textiles came into force after a decision was taken by the National Development Council (NDC) in December 1956.The net proceeds of AED are distributed among States in accordance with the principles laid down by successive Finance Commissions. The AED Act does not debar State governments from levying sales tax on these three items. However, if any State levies ST on the sale or purchase of these commodities, it would not be entitled to a share of the proceeds of AED, unless the Union Government directs otherwise.
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