Finance Bill 2006, Finance Bill 2006 India, Finance Bill 2006 Passed In The Lok Sabha

By: EconomyWatch   Date: 30 June 2010

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The Finance Bill 2006 has been passed by the Lok Sabha. Certain changes have been made in the direct and indirect tax provisions of the Bill, which are as follows:

Direct Taxes

Clause 16 of the Finance Bill, 2006 proposed that deduction under Section 80C of the Income-Tax Act shall also be available in respect of investment in term deposit with a scheduled bank for a fixed period of not less than five years.

The proposal was open-ended and therefore, difficult to implement. Accordingly, an official amendment to clause 16 of the Finance Bill, 2006 has been moved to provide that investment in term deposit with a scheduled bank would be eligible for deduction under section 80C if the term deposits are issued by the scheduled bank in accordance with a scheme framed and notified by the Central Government.

Indirect Taxes

CUSTOMS
Basic customs duty on Carbon Black Feed Stock has been reduced from 12.5% to 10%.
Basic customs duty on Polyester chips has been reduced from 12.5% to 10%.
Customs duty on Coronary stents and coronary stent systems for use with cardiac catheter has been fully exempted from customs duty as well as additional CV duty of 4%.

CENTRAL EXCISE
Scented supari, where the retail sale price is declared on the packages and such retail sale price does not exceed 50 paisa per package has been fully exempted from central excise duty.
Candles have been fully exempted from central excise duty.
Specified building Bricks have been fully exempted from central excise duty.
Hand operated rubber roller machines and hand operated copra dryers have been fully exempted from central excise duty.

Certain corrections are being made in the Fourth and Seventh Schedules, which are as under:
  • In the Fourth Schedule at

    Page 70, in line 6, in column (2), words "Aluminium phosphate", have been substituted by words "Aluminium phosphite".
    Page 70, line 23 has been substituted by "--- Other: ".
    Page 82, line 60, has been substituted by "6115 29 -- Of other textile materials".
    [These are to correct certain typographical errors/omissions, and to make certain technical corrections]

  • In the Seventh Schedule, at

    Page 146, in line 67, in column (4), the entry "Nil", has been substituted by the entry "8%".
    [It is a technical amendment consequent to imposition of 8% excise duty on packaged software]

SERVICE TAX
Clause (IA)- has been inserted, so as to insert a new section 93A in the Finance Act, 1994. The newly inserted section 93A empowers the Central Government to grant rebate of service tax paid on input services used in the manufacturing or processing of goods and provision of services, which are exported. This provision enables the Central Government to prescribe schemes for neutralization of service tax on input services used in export goods or services. The extent and manner of rebate will be prescribed separately.

Section 94, which gives powers to the Central Government to make rules, is also being amended so as to prescribe rules for rebate of service tax on export of goods or services

Source: PIB Press Releases.


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