Industry & Economy
-
Budget
A cess to educate
Krishnan Thiagarajan
A CESS of 2 per cent to finance universal access to quality basic education, which was virtually a certainty, has come through in the 2004-05 Budget. This cess will be applicable on all central taxes, including personal income, corporation, excise and customs duties.
Considering that the Centre's gross annual tax revenues are about Rs 2,50,000 crores, the Finance Minister has budgeted Rs 4000-5000 crore to be raised through this exercise.
Business Line examined the combined impact of this cess on excise and corporate tax outgo in 2003-04 for a universe of 5000 companies in the Indian corporate sector. While the excise duty levy will be passed on to the end-user, the corporate tax will be borne by the company.
The key trends which were visible were: (The top 100 companies were considered from this universe, as they accounted for more than 85 per cent of the combined excise and tax outgo stemming from the 2 per cent levy)·
The top companies which will have a combined excise and tax outgo (based on 2 per cent cess) of over Rs. 50 crore are HPCL, BPCL, ITC, Reliance Industries, ONGC, SAIL, Tata Motors, Indian Oil, Maruti Udyog and Tata Steel.
The 2 per cent cess computation on the combined excise and tax outgo as a percentage of Profit before taxes fall largely between 1-3 per cent.
The prominent companies in this bracket were Reliance Industries, BHEL, ONGC, Steel Authority of India, Tata Steel and Hindustan Lever. But there were some exceptions to this.
For select companies from the refining (HPCL, BPCL, Mangalore Refineries), auto (Maruti Udyog, Tata Motors, Ashok Leyland), petrochemicals (IPCL), cement (ACC) and cigarettes (ITC, Godfrey Philips) sector, this outgo will be much higher at 4-6 per cent.
More Stories on :
Budget |
Education
Article
E-Mail
::
Comment
::
Syndication
::
Printer Friendly Page
|
