Customs duty cuts planned

Budget likely in June-end, say finance ministry officials

Finance Minister Jaswant Singh has spelt out his first set of priorities for the revenue department for the forthcoming Budget, including further cuts in Customs duties.

Even though the finance ministry will have to await the results of the general elections, officials said some of the basic thrust areas were already in place.

These would be implemented, irrespective of the party came to power, they said. While no date for the general Budget has been finalised, officials said it was likely to be announced in the last week of June.

They said the finance bill had to be passed by Parliament before July-end, since the validity of the vote-on-account would expire after that.

Parliament will require at least a month, including the examination of the demand for grants by the standing committees, to pass the Budget and the Appropriation Bill.

The finance minister's brief for officials includes a reduction in the scope for discretionary use of power by the indirect tax department, and further reduction in transaction costs for industry.

This will be critical to defuse criticism from industry, as the ministry is committed to a cut in Customs duty. Such a move, however, will open the domestic industry to a higher level of international competition.

The ministry is also reviewing the impact of the tax assessee-friendly measures introduced in Budget 2003-04, and their impact on revenue collection.

The list of must-dos also incorporates the thrust areas for fiscal 2004-05, identified by a committee of secretaries headed by the cabinet secretary.

The finance ministry has also recommended that the pending issues flagged by the Kelkar report on direct and indirect taxes should be completed.

The Prime Minister's Office has already taken up the monitoring of the computerisation programme for the direct tax department. In indirect taxes, it is expected that the e-filing of excise returns will be launched by June 1.

The indirect tax department is also exploring more avenues for procedural simplification for factory owners and importers, so that they are encouraged to pay taxes.

Both the arms of the revenue department have been set stiff targets to raise revenue in this fiscal.

But the ministry is confident that given the encouraging trends in tax collection in 2003-04, the trend should continue into the current fiscal.

The aggregate target for indirect tax revenue is Rs 1,60,199 crore, compared with the revised estimate of Rs 1,41,729 crore. The direct tax mop up is expected to be Rs 1,25,855 crore, against Rs 1,03,750 crore achieved in 2003-04.