Budget 2014: Excise duty cut to cause up to Rs 1,200 cr revenue loss for govt
"I am talking about losing Rs 300-400 crore in 40 days (of the current fiscal). In April or May, perhaps we will lose about Rs 700-800 crore," Finance Minister P Chidambaram told reporters in a post budget interaction.
The Minister, however, added that the revenue loss "can be made up" if there is even five per cent pick up in sales.
With an aim to give a boost to the manufacturing sector, Chidambaram in interim budget 2014-15 today announced cut in excise duty, or factory gate tax, on capital goods, consumer durables and vehicles.
Excise duty has been reduced to 10 per cent from 12 per cent on a range of consumer goods till June 30, 2014. The new government will present the full budget for 2014-15 fiscal after general elections due by May.
Chidambaram said it is only a "notional loss" of revenue which is very less.
Also, the duty has been cut on SUVs, cars, motorcycles and commercial vehicles in the range of 3-6 per cent to give relief to the automobile industry, which is registering unprecedented negative growth.
The duty cut, which will remain in force till June 2014, is likely to bring down prices of vehicles and consumer durables.
Chidambaram in his budget speech said the rates can be reviewed at the time of the regular Budget.