BUDGET OUTLOOK
Automobile
excise duty cut by 8% to 16% from 24% on cars & utility vehicles.
increase in custom duty on imported CV's to 40% from 20%.
custom duty on specific raw material grades be brought down to 5% from 10-15%.
Customs duty on copper wire rods, which are the
raw materials for motors and agricultural pumps to be reduced from the current levels of 10%.
Maruti, Tata Motors, M&M (Major Players)
Banking
tax benefits under sec 80c for long term invest in fd.
tax exemption on interest on long term deposits.
increase in fdi/fii limit in psu banks from current 20% to 24%.
tax benefits on home loans for principal & interest payment to continue.
There is a need for a paradigm shift to encourage the banks to look at provision of credit to SME and agriculture more as an opportunity for profit rather than as a social obligation under directed subsidised credit.
Almost all Banking stocks will benefit. Housing FInance Stocks, NBFC (Major Players)
Chemicals
Reduction in the peak duty rate as 10% of current duty level of 15% i.e. 1.5% (from 15% to 13.5%)
Reduce customs duties on fuels to the ASEAN levels
Customs duty rate on basic building blocks to be 10% lower than the peak duty rate i.e. if peak duty is 15%, the basic building blocks should be at 5%
Introduce additional duty of customs equivalent to Central Sales Tax (CST) till CST is phased out.
100% CENVAT on capital goods in the first year
Allow purchase of HSD (High Speed Diesel) & LDO for export goods without excise duty
Abolish MAT
Gujarat Alkali, Tata Chemicals (Major Players)
Construction
1.Sec 80 1A be extended to projects
Corporate bodies in the industry with equity of more than Rs 1 crore be exempted from TDS
Depreciation Provision Include investment in equipments by the construction companies in the definition of installed capacity and grant benefit on additional depreciation granted on increase in installed capacity if the gross block exceeds by 25% in a year.
Tax exemption if surplus is re-invested in Infrastructure Projects
IVRCl Infra, Nagarjuna Construction, Hind Cons, Gammon (Major Players)
Fertilizers
1.Customs duty on urea is 15%.reduce it to 5%.
Reduce the burden of excise to 8 percent
Provide export incentives
GNFC, GSFC, Chambal, Zuari Agro (Major Players)
FMCG
rationalization of fbt.
reduction in custom peak duty from 15% to 10%
hike in excise duty on cigaretes.
promote the food processing sector through grants & subsidy under the section 80l benefit.
remove excise duty on biscuits & reduce vat to 4%.
special purpose tea fund for replantation & rejuvenation of tea bushes.
reduction in excise duty on soap.
no excise duty on shoes upto 500 per pair.
Britannia, Negative for ITC, Dabur (Major Players)
IT
rationalization of fbt.
reduction in fbt rates for bpo companies.
continuation of tax benefits under sector 10a & 10b till fy09.
increase in depreciation rate on all it products from excisting 60 to boost consumption.
Satryam, Wipro, Infosys, TCS (Major Players)
Metals
1.increase in import duty on steel from 5% to 10% to rectify the inverted duty structure.
increase in custom duty on alloy steel from 10% to 15%.
further cut in custom duty on imported steel raw materials like coal,scrap,coking coal.....
low ering of custom duty for non-ferrous metals on aluminium & zinc from 10%- 5%.
Customs duty on copper wire rods, which are the raw materials for motors and agricultural pumps to be reduced from the current levels of 10%.
Hindalco, Hind Zinc (Major Players)
Oil & Gas
custom duty on ms & hsd to be reduced from 10% to 7.5%.
transparent structure for subsidy sharing.
Customs and excise on petroleum products constitute about 40 per cent of the total customs/excise collections of the
Government. to bring out uniform sales tax thorughout the country for per\troleum products so that rates rationalisation could happen.
Negative of ONGC, HPCL, IOC, BPCL (Major Players)
Paper
Levy excise at a uniform rate of 8% irrespective of the type of raw material used
Retain the customs duty on paper/paperboard at the current rate of 15%
Levy of import duty on printed books, periodicals and journals equivalent to that on paper
Create a technological upgradation fund for the paper industry
Export Promotion
BILT (Major Players)
Pharma
Reduction on excise duty from 16% to 8% on m.r.p.
reduction in custom duty from 10% to 5%.
extension of r&d benefits of weighed average deduction of 150%.
rationalization of fbt
Ranbaxy, Orchid Chem, CIpla (Major Players)
Power
tax exemptions us 801A for power project for new projects to be extended upto 2012.
duty waiver on fuels like naptha,coil & lpg.
fdi in coal mining.
rationalization of custom duty on spare parts from 35% to 16%.
reduction in excise duty on power equipments from 16% to 8%.
custom duty waiver for 800kv transmission systems.
Bhel, ABB, Siemens, Tata Power (Major Players)
Shipping
service tax exemption on all input services.
profit/loss araising on sale of ship should be considered part of core income.
interest on funds depolyed from unutilized amts to buy ships shall be treated as core income.
.heavy thrust to modernise ports.
SCI, Ge Shiping, Bharti Ship (Major Players)
Sugar
excise duty on molasses to be brought down to rs.170/ton. or be imposed ad-valorem.
extension of tax benefits to co-gen power under section 801A for another five yrs.
white sugar re export obligation period to be extended by 36 mtns.
extension of 80% deprecition for plant & machinery for ethanol manufacturing.
KCP Sugar, Bajaj Hind, Dhampur Sugar, EID Parry (Major Players)
Telecom
1.extension of tax holiday under 801a to 20 yrs from 15yrs currently.
reduction in annual license fee from 10% to a uniform 6%.
reduction in service tax from 10% to 5%.
reduction in spectrum charges from 6% to 4%.
reduction in customs duty on telecom service equipment.
accurate definition of AGR to avoid issues
of double taxation.
Bharti, MTNL (Major Players)
Textiles
excise duty on psf,pfy & asf cut 8% from 16%.
custom duty on pta,meg,caprolactum,fiber & yarn to be reduced to 8% from 16%.
relaxing on labour laws.
existing depb to be replaced by new export incentive scheme.
rationalization of fbt.
Arvind, Raymond, Century Textile (Major Players)
Tourism & Hotels
allocation to the tourism industry upto rs.20bn.
tax rate of 4% on air turbine fuel.
rollaback of depreciation rate on hotel building to 20% from the present 10%.
rationalization of fbt.
modernization of railways & airports.
modernization of roads & infrastructure development.
Automobile
excise duty cut by 8% to 16% from 24% on cars & utility vehicles.
increase in custom duty on imported CV's to 40% from 20%.
custom duty on specific raw material grades be brought down to 5% from 10-15%.
Customs duty on copper wire rods, which are the
raw materials for motors and agricultural pumps to be reduced from the current levels of 10%.
Maruti, Tata Motors, M&M (Major Players)
Banking
tax benefits under sec 80c for long term invest in fd.
tax exemption on interest on long term deposits.
increase in fdi/fii limit in psu banks from current 20% to 24%.
tax benefits on home loans for principal & interest payment to continue.
There is a need for a paradigm shift to encourage the banks to look at provision of credit to SME and agriculture more as an opportunity for profit rather than as a social obligation under directed subsidised credit.
Almost all Banking stocks will benefit. Housing FInance Stocks, NBFC (Major Players)
Chemicals
Reduction in the peak duty rate as 10% of current duty level of 15% i.e. 1.5% (from 15% to 13.5%)
Reduce customs duties on fuels to the ASEAN levels
Customs duty rate on basic building blocks to be 10% lower than the peak duty rate i.e. if peak duty is 15%, the basic building blocks should be at 5%
Introduce additional duty of customs equivalent to Central Sales Tax (CST) till CST is phased out.
100% CENVAT on capital goods in the first year
Allow purchase of HSD (High Speed Diesel) & LDO for export goods without excise duty
Abolish MAT
Gujarat Alkali, Tata Chemicals (Major Players)
Construction
1.Sec 80 1A be extended to projects
Corporate bodies in the industry with equity of more than Rs 1 crore be exempted from TDS
Depreciation Provision Include investment in equipments by the construction companies in the definition of installed capacity and grant benefit on additional depreciation granted on increase in installed capacity if the gross block exceeds by 25% in a year.
Tax exemption if surplus is re-invested in Infrastructure Projects
IVRCl Infra, Nagarjuna Construction, Hind Cons, Gammon (Major Players)
Fertilizers
1.Customs duty on urea is 15%.reduce it to 5%.
Reduce the burden of excise to 8 percent
Provide export incentives
GNFC, GSFC, Chambal, Zuari Agro (Major Players)
FMCG
rationalization of fbt.
reduction in custom peak duty from 15% to 10%
hike in excise duty on cigaretes.
promote the food processing sector through grants & subsidy under the section 80l benefit.
remove excise duty on biscuits & reduce vat to 4%.
special purpose tea fund for replantation & rejuvenation of tea bushes.
reduction in excise duty on soap.
no excise duty on shoes upto 500 per pair.
Britannia, Negative for ITC, Dabur (Major Players)
IT
rationalization of fbt.
reduction in fbt rates for bpo companies.
continuation of tax benefits under sector 10a & 10b till fy09.
increase in depreciation rate on all it products from excisting 60 to boost consumption.
Satryam, Wipro, Infosys, TCS (Major Players)
Metals
1.increase in import duty on steel from 5% to 10% to rectify the inverted duty structure.
increase in custom duty on alloy steel from 10% to 15%.
further cut in custom duty on imported steel raw materials like coal,scrap,coking coal.....
low ering of custom duty for non-ferrous metals on aluminium & zinc from 10%- 5%.
Customs duty on copper wire rods, which are the raw materials for motors and agricultural pumps to be reduced from the current levels of 10%.
Hindalco, Hind Zinc (Major Players)
Oil & Gas
custom duty on ms & hsd to be reduced from 10% to 7.5%.
transparent structure for subsidy sharing.
Customs and excise on petroleum products constitute about 40 per cent of the total customs/excise collections of the
Government. to bring out uniform sales tax thorughout the country for per\troleum products so that rates rationalisation could happen.
Negative of ONGC, HPCL, IOC, BPCL (Major Players)
Paper
Levy excise at a uniform rate of 8% irrespective of the type of raw material used
Retain the customs duty on paper/paperboard at the current rate of 15%
Levy of import duty on printed books, periodicals and journals equivalent to that on paper
Create a technological upgradation fund for the paper industry
Export Promotion
BILT (Major Players)
Pharma
Reduction on excise duty from 16% to 8% on m.r.p.
reduction in custom duty from 10% to 5%.
extension of r&d benefits of weighed average deduction of 150%.
rationalization of fbt
Ranbaxy, Orchid Chem, CIpla (Major Players)
Power
tax exemptions us 801A for power project for new projects to be extended upto 2012.
duty waiver on fuels like naptha,coil & lpg.
fdi in coal mining.
rationalization of custom duty on spare parts from 35% to 16%.
reduction in excise duty on power equipments from 16% to 8%.
custom duty waiver for 800kv transmission systems.
Bhel, ABB, Siemens, Tata Power (Major Players)
Shipping
service tax exemption on all input services.
profit/loss araising on sale of ship should be considered part of core income.
interest on funds depolyed from unutilized amts to buy ships shall be treated as core income.
.heavy thrust to modernise ports.
SCI, Ge Shiping, Bharti Ship (Major Players)
Sugar
excise duty on molasses to be brought down to rs.170/ton. or be imposed ad-valorem.
extension of tax benefits to co-gen power under section 801A for another five yrs.
white sugar re export obligation period to be extended by 36 mtns.
extension of 80% deprecition for plant & machinery for ethanol manufacturing.
KCP Sugar, Bajaj Hind, Dhampur Sugar, EID Parry (Major Players)
Telecom
1.extension of tax holiday under 801a to 20 yrs from 15yrs currently.
reduction in annual license fee from 10% to a uniform 6%.
reduction in service tax from 10% to 5%.
reduction in spectrum charges from 6% to 4%.
reduction in customs duty on telecom service equipment.
accurate definition of AGR to avoid issues
of double taxation.
Bharti, MTNL (Major Players)
Textiles
excise duty on psf,pfy & asf cut 8% from 16%.
custom duty on pta,meg,caprolactum,fiber & yarn to be reduced to 8% from 16%.
relaxing on labour laws.
existing depb to be replaced by new export incentive scheme.
rationalization of fbt.
Arvind, Raymond, Century Textile (Major Players)
Tourism & Hotels
allocation to the tourism industry upto rs.20bn.
tax rate of 4% on air turbine fuel.
rollaback of depreciation rate on hotel building to 20% from the present 10%.
rationalization of fbt.
modernization of railways & airports.
modernization of roads & infrastructure development.
