Govt to roll back stimulus, raises excise duty by 2% on all non-oil products
Excise duty was cut by 6% in two phases since December 2008 from a peak of 14% earlier to perk up the economy, which came under the impact of deepening financial crisis.
The government today raised excise duties by 2%, to 10%, on all non-oil products as part of withdrawal of the stimulus measures with finance minister Pranab Mukherjee saying the economy was on the road to recovery.Excise duty was cut by 6% in two phases since December 2008 from a peak of 14% earlier to perk up the economy, which was struggling with the impact of the deepening global financial crisis.
But Mukherjee, in the budget for 2010-11, retained service tax at the level of 10%. The tax was cut by 2% from 12% as part of the stimulus plan.
The tax proposals will pave the way for the introduction of a goods and services tax (GST) by levelling both exise duty and service tax at 10%.
Interestingly, the increase in excise duty came on a day when economic growth slipped to 6% in the third quarter from the stunning 7.9% in the preceding quarter of this fiscal.