April 30, 2010 7:59 AM

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Govt announces special debt relief package for coffee growers, housing & health sectors

The government has announced fresh relief package for coffee growers. Tax concessions for building hospitals, urban housing for poor, local tobacco industry and cancer and AIDS drugs also announced. Replying the debate on Finance Bill, 2010-11, which was later passed by the House through voice vote, Finance Minister Pranab Mukherjee announced a special debt relief package for coffee growers estimated to cost over 241 crore rupees with a benefit of about 363 crore rupees to the coffee growers. With a view to giving impetus to health care, the Minister announced tax breaks for construction of hospitals with at least 100-bed anywhere in the country including land cost. Reiterating UPA's commitment of a slum free India, Mr Mukherjee extended both direct and service tax benefits for the housing projects meant for rehabilitation and redevelopment of slums including the JNNURM and Rajiv Awaas Yojana. He also exempted from taxation the transfer of shares by share holders of a company following the decision to allow tax neutrality for conversion of a company in to limited liability partnership. Lower excise duty on hand-made cheroots priced up to three rupees following demands from members and the industry. They include reduction of ad valorem to 10 per cent, an additional excise duty of 1.6 per cent. Full exemption on excise duty on supari has also been announced. Central excise duty on corrugated boxes and cartoons have been reduced from 8 to 4 per cent. The Minister clarified that the impact of imposition of service tax on air traffic will be minimal. It will be 100 rupees per travel for domestic journey in any class and maximum of 500 rupees travel for international journey for economy class. He however said that air travel North-Eastern states will remain exempted from service tax.<br/> He announced five per cent reduction in custom duties on eleven specified drugs including two anti-cancer and one for the treatment of AIDS. Flax Fibre and Yarn have been fully exempted from customs duty. Mr. Mukherjee said that export duty on statutory rate of raw cotton is being enhanced from 2500 per metric tonne to 10 thousand rupees per metric tonnes. Export duty on Iron ore lamps has been increased to 15 per cent. Tunnel boring machines used for hydro-electric projects have been fully exempted from customs duty and the rate of customs duty for medical equipment has also been moderated. <br/> Defending the hike in excise on petroleum products, Mr Mukherjee said that the government has to look at ways of meeting the 85,000 crore rupees revenue loss on fuel sale expected this fiscal. He said that a major chunk of the amount recovered thus will be given to states as per the recommendations of the 13th Finance Commission. He said that the government has taken up the issue of unearthing tax havens at a massive scale. Rebutting the opposition charges, he said, the issue has been taken up with 65 countries and the negotiations to have an agreement on are at an advanced stage with Switzerland and two other countries. <br/> The opposition NDA and the Left parties staged a walkout in protest against the government's decision not to roll back increase in petroleum products. <br/> Admitting the shortcomings in the delivery mechanism, Mr Mukherjee urged state governments to strengthen PDS. He said, government has taken a series of measures which include bridging the gap between supply and demand. He, however, said that despite high food inflation, it has been the endeavor of the government to ensure that poor and vulnerable sections are not affected. <br/> Accepting that the provision of 400 crores for extending green revolution to eastern states was not sufficient, the Finance Minister said that the allocations will be gradually increased. Our Parliamentary correspondent reports that the opposition including the BJP and Left, while participating in the debate, charged the government of inaction on price rise and ignoring the interests of common man.<br/>

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