The Hindu : Business : Panel on excise abatement set up

Online edition of India's National Newspaper
Wednesday, May 04, 2005

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Business

Panel on excise abatement set up

Special Correspondent

To meet representations from trade and industry

NEW DELHI: The Union Finance Ministry, in keeping with the Finance Minister, P. Chidambaram's announcement in his budget speech for the current year, has set up a committee to advise the Government on the extent of abatement for excise duty and service tax.

The advisory committee, according to an official statement here on Tuesday, is being chaired by the Member (Central Excise), Central Board of Excise and Customs (CBEC). The Member (Service Tax) on the board is to be the co-chairperson. The Additional Chief Advisor (Cost) in the Department of Expenditure will be a member of the advisory panel while the Joint Secretary (Tax Research Unit) is to be the member-secretary.

The panel may co-opt officers from other ministries and departments concerned at the Centre as also invite experts and representatives from the trade and industry as special invitees.

Section 4A of the Central Excise Act, 1944, empowers the Centre to notify certain excisable goods subjected to ad valorem levy, the excise duty on which is to be assessed with reference to their retail sale price. In such cases, the assessable value is arrived at after deducting the notified percentage of abatement from the retail sale price. The quantum of abatement is notified by taking into account the amount of excise duty, sales tax, other taxes and trade margins. In case of certain taxable services, specified abatements from the gross value are prescribed to arrive at the assessable value on which service tax is charged.

Explaining the need for setting up the advisory panel, the statement said the Government had been receiving representations from industry and trade for evolving a system to make the process of quantifying the level of abatement for goods chargeable to duty on retail sale price basis in a transparent manner. A mechanism to review the rate of abatement to reflect the changed circumstances was also desired. Mr Chidambaram, in his budget speech, had also reiterated the need for such a system.

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