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Budget 2006-07 Highlights


Many Exemption Notifications done away.
Tax GDP ratio to go up by 11.2 % from 10.5 %

Central Excise
Excise duty on cigarette hiked by 5 %
Cess on domestic crude hiked to Rs.22.50.
Credit for excise duty on computer to be allowed.
CFL lamps to attract only 8 % excise duty.
Footwear with MRP of Rs.250-700 to attract only 8 % excise duty.
Condensed milk and icecreams exempted from excise duty.
8 % excise duty levied on packaged software & DVD drive.
Excise duty reduced from 24 % to 16 % on small cars & aerated drinks.
Excise duty on manmade and filament yarn reduced from 16 % to 8 % and customs duty down to 10 %.

CVD of 4 % in lieu of VAT imposed on all inports except a few; Credit to be allowed.

Cancer and anti-AIDS drugs to attract only 5 % customs duty; No excise & CVD.

Definition of captive consumption to be amended fro power generation.
Excise duty on instant food cut to 8 %.
Duty on packaging machines down to 5 % from 15 %.
Excise duty abolition on branded foods.
Excise duty on CFC reduced to 16 %.
Increase in excise duty on computers.

Duty for DTA clearance by EOU's.

   
Customs
Customs duty on refractories to be 7.5 %.
Chemical catalysts to be 5 %; PVC + LDPE to attract only 5 %.
Naphtha for plastic to attract nil rate. Duty on mineral products reduced to 5 %.
Peak Customs duty for non-agri products to be 12.5 %; Duty on alloy steel to be 7.5 %; Duty on ore to be 2 %.
Customs duty down to 10 % on manmade and filament yarn.
Customs duty on major bulk plastics reduced from 10 % to 5 %.
Customs duty cut on zinc.
Duty cut on iron ore.
Duty cut on vital drugs. Cancer & anti-AIDS drugs to attract only 5 % customs duty; No excise & CVD.
Cut in peak customs duty.

Duty on inorganic chemicals cut to 10 %.

   
Service Tax
Service tax rate hiked to 12 %.
Service tax scope for existing services widened;
Service tax levied on ATM services; international air travel; business support service; recovery agents and PR management services.
   
Other
Now new direct tax imposed. No change in rates of personal or corporate income tax.
FBT exemption given to group insurance scheme upto Rs.one lakh; Tour & travel FBT rate down to 5 %; Shipping & air travel down to 5 %.
Cash withdrawal tax to continue till AIR system becomes reliable and robust.
More transactions to be brought under PAN ambit.
Anonymous donation to charitable institutions to be taxed.
Section 80-l deadline extended to 2009 fro power projects.
MAT rate increased from 7.5 % to 10 %. MAT credit period extended to 7 years.
One-by-six scheme abolished.
No FBT on free samples to doctor No FBT on payment to brand ambassadors.
To remove 10 % cap on overseas investment by Mutual Funds.
Inclusion of Fixed Deposits under Section 80C.
Extension of tax breaks under Section 80IA

Short Term Transaction tax hiked by 25 %.