Responding to the points raised by the members on the debate on finance Bill, the Finance Minister Pranab Mukherjee announced withdrawal of the proposed 5 per cent service tax on air conditioned hospitals with more than 25 beds and on diagnostic services.
Later the Lok Sabha Tuesday passed the Finance Bill through voice vote.
The Finance Minister proposed to enhance the abatement of 40 per cent to 55 per cent on the retail sale price on Garment exports. With this relief a unit will continue to be eligible for SSI exemption in 2011-12 even if it had a turnover based on retail sale price of 8.9 crore rupees in the current year. This step will address the concerns of small scale exporters.
With regard to the proposal to reduce basic customs duty on raw silk from 35 percent to 5 per cent, the Minister said it was aimed at augmenting the supply to weavers in both handloom and the powerloom sector. He added this is to bridge the gap between the demand and supply and is not permanent. He said, Indians investing in overseas joint ventures with holdng of 26 per cent will enjoy low tax rate of 15 per cent. Earlier, this concession was only for those who had 50 per cent stake in such ventures.
Referring to the financial sector reforms, the Minister said, the government proposes to pursue three more financial sector legislations — PFRDA Bill, the Bill on Factoring and Assignment and the State Bank of India Subsidiary Bank Law Amendment Bill — in the coming days. Mr. Mukherjee reiterated the government’s commitment to bring down the fiscal deficit to 2.5 per cent and the revenue deficit to zero.
Mr. Mukherjee had earlier in the day tabled, the Banking Law Amendment Bill 2011 and the Constitutional Amendment Bill for introduction of Goods and Services tax (GST). On the crisis emanating from political uncertainties in Middle East and Libya, Mr. Mukherjee said the country can withstand the impact of such crisis. He expressed hope that the political uncertainty in this region will come to an end soon. He however, cautioned that this situation may have adverse impact on the availability of energy resources.
