Excise Duty on Mobile Phones To Be Restructured to Encourage Domestic Manufacturing [Budget 2014]

Finance Minister P Chidambaram. Image: Wikipedia
Finance Minister P Chidambaram. Image: Wikipedia

To encourage domestic production of mobile handsets, the government has proposed to restructure excise duties in all categories to 6% with Central Value Added Credit & 1% without Cenvat credit, Finance Minister P Chidambaram who tabled the interim budget for 2014 said.

Manufacturers or service providers are eligible for Cenvat credits on the excuse duty it pays for inputs like raw materials.

In last year’s budget, the finance ministry increased excise duty to 6 per cent from 1 per cent on phones costing over Rs 2000. That pushed up the price of smartphones in the country by 4-5% but didn’t have any material impact on consumption.

Government Will Fully Back Aadhaar

The Indian government is fully committed to Aadhaar, the scheme which seeks to issue a unique verifiable identity number to over 1.2 billion Indians, Finance Minister P Chidambaram said. 

Chidambaram who tabled the interim Budget 2014 in the Lok Sabha said

The Government remains fully committed to Aadhaar under which 57 cr numbers have already been issued. I have no doubt that in course of time, even critics of Aadhaar will realise that Aadhaar is a tool for empowerment.

While the National Identification Authority of India, which gives legal backing to the Unique Identification project, is still pending, the government approved direct cash transfers to beneficiaries of government schemes through the Aadhaar platform. This is being contested in the Supreme Court now.

Chidambaram said that Rs 3,370 cr has already been transferred to 2.1 cr LPG users but the scheme has been temporarily put on hold. In an interim order, the Supreme Court had disallowed government from making Aadhaar mandatory to avail government benefits.

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