The Vijay Kelkar-led task force on indirect taxes has recommen- ded a two-tier excise duty structure of 16 per cent and 8 per cent, reducing special excise duties to 12 per cent from the current 16 per cent, a 5 per cent cut in the peak Customs duty from 30 per cent now, besides doing away with a host of exemptions for the next financial year.
It has also asked for a 16 per cent excise duty on petroleum products, along with a 5 per cent basic customs duty differential between crude and other petroleum products, and reducing the number of export promotion schemes to two.
Releasing the consultation paper at a press conference today, Vijay Kelkar, adviser to the finance minister, said the two key elements of the paper were removal of transaction costs and ensuring stability in fiscal practices.
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The report quotes an Exim Bank study to say that reducing transaction costs in exports will yield a gain of Rs 4,000-5,000 crore a year for the economy.
The paper is part of finance minister Jaswant Singh