Govt to earn Rs 40,000 cr from excise hike, petro duties

The government today said it will earn an additional Rs 40,000 crore from the hike in excise and restoration of duties on petroleum products, while it will lose Rs 21,000 crore due to income tax sops.

Of the Rs 40,000 crore, Rs 14,000 crore would come from excise duty hike and Rs 26,000 crore from petro duties, Revenue Secretary Sunil Mitra told reporters on the sidelines of a FICCI AGM.

The government in the Budget yesterday raised excise duty, which was lowered to 8 per cent during the slowdown, to 10 per cent and also restored duties on petroleum products.

In addition, the government stands to gain Rs 3,000 crore from service taxes on 8 new segments and 4 existing ones and another Rs 2,000 crore from the clean energy cess on coal, he said.

Other changes in the indirect taxes will contribute another Rs 1,500 crore, giving the government a total gain of Rs 46,500 crore.

On the direct taxes front, the changes in the slab will result in a loss of Rs 21,000 crore, and surcharge reduction from 10 per cent to 7.5 per cent on corporate taxes in Rs 5,000 crore. Exemptions on investments in infrastructure bonds will result in a loss of  Rs 6,000 crore.

However, increasing MAT form 15 to 18 per cent on book profits of companies that do not fall under the tax net because of various exemptions will fetch the govt Rs 6,000 crore.