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Govt gets Cabinet nod to hike excise duty without any limitation

Tara Shankar Sahay in New Delhi

The Union Cabinet on Tuesday decided to permit the Union finance ministry to increase excise duty without any limitation on certain items under emergency powers of the Central Excise Tariff Act, 1985, according to Parliamentary Affairs Minister Pramod Mahajan.

Briefing reporters on the outcome of the Union Cabinet meeting on Tuesday morning, Mahajan pointed out that the Cabinet had taken the decision to allow an ordinance to amend Section 31B of the Act, thus allowing the Union finance ministry to raise excise duty on certain items without any limitation.

The minister, however, did not specify the items, underling that it was up to the finance minister to pinpoint the items.

Mahajan also declined to comment on reporters' queries whether the finance ministry was contemplating to raise excise duty in view of the tense situation between India and Pakistan which had resulted in intensive troops build-up on both sides of the Indo-Pak border.

Recent media reports had indicated that the Vajpayee government was all set to empower finance minister Yashwant Sinha to enhance excise rates to mobilise additional resources for the deployment of troops and military hardware on the country's borders, especially in the International Border and Line of Control in Jammu and Kashmir.

Mahajan contended that the proposal of the finance ministry would be forwarded to President K R Narayanan. The President is expected to sign the ordinance which would enable the necessary amendment of the Central Excise Tariff Act, 1985 for mobilising additional funds.

According to a senior government official, who did not wished to be named, India has already spent more than Rs 5 billion in deploying troops on the border with Pakistan, underling that ' the deployment ( of troops and military hardware ) is as expensive as fighting the war'.
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