The revenue department has decided to keep tabs on the items on which duties were reduced in the Budget for 2003-04. Excise duty cuts on cars, announced in the Budget for 2001-02, failed to translate into lower retail prices.
In a letter to the chief commissioners of indirect tax, the revenue department has asked for data on the prices of motor cars, air-conditioners, aerated water, medical equipment and cement. The list consists of 26 items.
Finance Minister Jaswant Singh reduced the excise duties on motor cars, air-conditioners and aerated water by 8 percentage points to 24 per cent.
Data will be collected on the price patterns and revenue implications of these items. The letter says the information on prices should be submitted to the finance ministry by March 15, and subsequently on the 15th of every month.
The letter added that the information furnished should be accurate because the revenue department would use it to brief the finance minister at the time of discussion on the Finance Bill, 2003, in Parliament.
The government has been criticised for having reduced excise duties on luxury goods, on the ground that they do not translate into lower prices for consumers and only help producers.
The revenue department has also asked for a special report on several of these cases, which will be scrutinised for further action.
The other items for which the department has asked for special reports include petrol, high-speed diesel, spun and woollen yarn, polyester, ceramic tiles, processed cotton fabrics, made-up textile articles, ready-made garments and tyres.
The pricing information was also necessary to map the impact of the duty cuts on revenue collection, revenue department officials said. The finance ministry has often relied on guess work to make projections on the impact of various tax changes.
