Simplified audit system to replace monthly checks

A new central excise draft policy would be prepared within a month and placed before the apex chambers of commerce for their views, he said, adding that this report would reveal the shape of things to come.

Also on the anvil is an advance ruling authority for excise and customs that would soon be set up to provide a clear picture to foreign investors as to the nature of their tax incidence in the country, he said, adding that this facility would later be extended to domestic manufacturers.

India is moving towards a central VAT value added tax system with an effectivesingle rate. The broad approach for the next five years would be rates around 8-13 per cent for necessities and items of direct consumption, while demerit goods would attract rates in the range of 18-25 per cent, he said. quot;This also means bringing exempted items into the tax net and we have made a beginning towards this in the budget,quot; he said.

IMC president Y P Trivedi said, the restriction in modvat credit to 95 per centquot;is not a right step in the liberal spirit of the economic reforms processquot;. Solanki said, the five per cent reduction in modvat credit would be restored quot;as soon as the present revenue constraints were easedquot;.