Govt to lose Rs 4,900 cr revenue after duty cut

The government is likely to lose about Rs 4,900 crore revenue in a full year after the cut in customs duty on many items over the past few months as part of measures to check rising prices.

The government is likely to lose about Rs 4,900 crore revenue in a full year after the cut in customs duty on many items over the past few months as part of measures to check rising prices. The government has reduced import duty on essential goods such as pulses, maize, wheat, edible oils as well as metals, capital goods and cement this fiscal prior to the budget, minister of state for finance S S Palanimanickam told Rajya Sabha in a written reply.

“Revenue loss on account of these changes is estimated to be around Rs 4,900 crore in a full year,” he said. The changes in import duties were expected to bring down the cost of manufactured goods. The minister also said commodity prices depended on many factors such as supply-demand position, domestic production and international prices.

Asked whether cut in import duty of wheat and pulses have not been successful in bringing down inflation, the minister said the duty cut had a limited impact on prices of the commodities because of firm international prices. But sugar prices have reduced of late, he said. Customs duty exemption on imported wheat expired on February 28 this year with government ruling out an extension as the country is expected to produce a good harvest in 2007. Import duty on pulses, valid till July 31, 2007, was abolished from ten per cent in June last year to check rising domestic prices of urad, chana and moong. The government allowed duty-free import of maize for 2007 on January 25 after poultry industry and starch manufacturers requested for the sop.

In another major development, The Directorate General of Central Exercise Intelligence booked nine companies and seven non-banking finance companies for service tax evasion. The Sahara Group, IBM India and Indian are among the companies booked for the service tax evasion of a total of Rs 300 crore , the Rajya Sabha said.

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