The Hindu : Kelkar panel for rationalising indirect taxes

Online edition of India's National Newspaper
Saturday, Dec 28, 2002

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Kelkar panel for rationalising indirect taxes

New Delhi Dec. 27. The task force on indirect taxes, headed by Vijay Kelkar, has suggested the removal of customs duties other than basic customs, countervailing and safeguard duties. In its report submitted to the Finance Minister, Jaswant Singh, today, the task force recommended a roadmap for rationalisation of indirect taxes.

It suggested zero per cent customs duty on items such as life-saving drugs and equipment, sovereign imports such as defence and security-related goods and imports by the Reserve Bank of India. By 2004-05, the customs duty should be pruned to 10 per cent for raw materials, inputs and intermediate goods and 20 per cent for consumer durables.

By 2006-07, according to the committee, the customs duty should be five per cent for basic raw materials such as coal, ores and concentrates and xylenes, eight per cent for intermediate goods, which will be used for future manufacture (capital goods, basic chemicals and metals), 10 per cent for finished goods other than consumer durables and 20 per cent for consumer durables. The removal of special additional duty (SAD) should be linked to the implementation of State-level VAT, when SAD would get replaced by the State VAT to be levied on imports.

UNI

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