BUDGET - BMR Advisors

Reduction of customs duty on cold storageequipmentDevelopment of various logistics channels viz ports, roads,railways etc is one of the key requirements of growth of theIndian economy. Faster initiatives for development of ports,roads and railways have been proposed in upcoming UnionBudget 2008.There is also a likelihood of reduction in the basic customs dutyrate on cold storage equipment to 5 percent.Reduction of customs duty on project importsCentral government is empowered to notify infrastructureprojects as “project imports” under the customs. Imports forcertain projects such as Drinking Water Supply Projects areexempt from customs duty. In most of the other cases, customsduty rate of 7.5 percent is prescribed.It is proposed that customs duty rate on project imports bereduced to 5 percent to encourage more projects fordevelopment of infrastructure of the country.Service taxExemption from service tax to all infrastructure projectsInfrastructure is the backbone for the Indian economy, as apromotional measure, all infrastructures of national importanceshould be exempted from the levy of service tax.Commercial or industrial construction services to major andother ports are exempt from service tax.On the above lines the commercial or industrial constructionservices to all infrastructure projects such as power stations,sewerage projects, irrigation projects, waste treatment plants,water treatment plants and drainage systems should also beexempted from the levy of service tax.Service tax exemption on input services for keyinfrastructure projectsInfrastructure is the key driver for India’s economic growth.Infrastructure related projects include construction of roads,indiaBUDGET200851