The Lok Sabha today passed the Finance Bill after Finance Minister Pranab Mukherjee rolled back Five per cent service tax on health care and announced a few other tax concessions. With the passage of the Finance Bill, the Lok Sabha completed the three-stage budgetary exercise amid walkout by the Opposition BJP. Replying to the debate on Finance Bill, Mukherjee also modified tax proposals relating to ready-made garments, dividend tax, personal computers, printers, mobile phones and auto parts. The announcement of withdrawal of the 5 per cent service tax on services provided by air-conditioned hospitals of more than 25 beds and on diagnostic services was greeted with loud thumping on desks by members. Mr Mukherjee also exempted coking coal used in manufacture of iron and steel from customs duty and reduced duty on CKD (completely knocked down) kits containing re-assembled engine, gear-box or transmission assembly for the manufacture of vehicle.The minister, however, imposed one per cent additional excise duty and CVD on mobile handsets. With regard to direct taxes, the Minister relaxed the norms for companies which shall be entitled to pay tax at concessional rate of 15 per cent on dividends received from overseas subsidiaries. Referring to the concern expressed by small scale garment manufacturers on 10 per cent excise levy on branded ready-made textiles garments, Mr Mukherjee proposed to enhance the abatement from 40 per cent to 55 per cent of the retail sale price. 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. On the reduction of basic customs duty on raw silk from 30 per cent to 5 per cent ad valorem, he said, there has been representations supporting and opposing the move. The Minister said, the government would keep a close watch on import volumes and domestic prices and respond, if required, to mitigate any impact on the domestic sericulture sector. Announcing some relief for the computer industry, the Finance Minister said, he is extending the concessional rate of 5 per cent Countervailing Duty and nil SAD (special additional duty) to parts of all computer printers imported by actual users. He also exempted certain special parts of personal computers from levy of special additional duty of customs.

The Lok Sabha today passed the Finance Bill for the next fiscal. The Bill was passed through voice vote. Responding to the points raised by the members, 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. 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.