Special excise duty may be applicable from July 1

The one percent special excise duty is likely to be applicable at local manufacturing stage from July 1, 2007. Sources told Business Recorder on Wednesday that the Central Board of Revenue (CBR) has abolished one percent special surcharge on the import of all kinds of goods from June 21, 2007.
Previously, surcharge was withdrawn on specific items, zero-rated sectors and other items specified in different notifications. Now, the board has withdrawn this levy on the import of all items covered under the Finance Bill 2007-2008.
According to sources, one percent special excise duty may be levied on the import as well as at local manufacturing stages from July 1. However, the board has not yet issued the relevant notifications on levying this excise duty. The draft notifications have been prepared in this regard.
Explaining rationale of surcharge, sources said that Rs 25 billion were added to the revenue target of Rs 1 trillion, taking the total target to Rs 1.025 trillion for fiscal 2007-2008.
To collect an additional amount of Rs 25 billion in 2007-2008, it was agreed to impose one percent surcharge on the import of all goods excluding essential commodities. Along with other revenue measures, the surcharge would help in the collection of Rs 13 billion in the next fiscal.
It was a specific revenue generation measure taken by the CBR to collect additional amount of customs duty. If special excise duty is being levied on the import of goods as well as at local manufacturing stage, it would replace the surcharge and help in the collection of over and above Rs 13 billion.
Sources said that one percent surcharge is not a unique concept in the region, as different types of surcharges are already applicable on imports in India.
It is important to mention that other revenue spinners in 2007-2008 are revision of tariff on automobile industry (Rs 1.3 billion); 20 per cent sales tax on specified raw materials (Rs 9.1 billion); rationalisation of excise duty on international air travel (Rs 6 billion); increase in excise duty on cigarettes (Rs 4.5 billion); and extension of scope of excise duty on non-fund banking services would generate one billion rupees.