Duty cuts to impact revenue by over Rs 28,000cr

The Finance Ministry said the fiscal sops given to provide stimulus to the slowing down economy will be effective from midnight today and will have revenue implications of over Rs 28,000 crore.

"The measures will lead to revenue loss of Rs 13,000 crore in service tax, Rs 8,500 crore in excise duty and Rs 6,600 crore in customs duty," Central Board of Excise and Customs Chairman P C Jha told reporters here.

When asked whether there is possibility of further rate cuts, he said, "I don't think so."

Jha said the measures would be effective from midnight today.

Finance Minister Pranab Mukherjee today announced a two per cent cut in excise duty and service tax, and extended the current reduction of four per cent in excise duty beyond March 31, 2009.    

Jha said reduction in excise duty by two per cent is effective in the slab of 10 per cent only.
    
Besides, customs duty exemption for naphtha imported for power generation would be extended to the next fiscal, Mukherjee said.