BUDGET - BMR Advisors

from customs duty. However, within the lifetime of project suchgoods were capable of being diverted by the contractors for usein other projects.In view of the above, exemption would now be available onlywhen goods imported are not withdrawn by the supplier or thecontractor within the lifetime of the project. Similar amendmenthas also been carried out in case of excise exemption.Period of re-export of leased equipment increasedThe period for re-export of leased equipment and machinery,imported for temporary use in contracts is proposed to beincreased from 12 months to 18 months along with revised slabsof exemption from customs duty.Consequently the period of retention and use of imported goodsfor the purpose of claiming duty drawback has also beenreduced from existing 36 months to 18 months.ExcisePeak rate of excise duty reduced to 14 percentManufacturing sector is the backbone of our economy. It isconsumption that drives production and it is production thatdrives investment. In view of the current trends of production andconsumption and to give stimulus to the manufacturing sector,the peak rate of excise duty has been reduced from 16 percent to14 percent.Consequently, countervailing duty of customs on plant,machinery, apparatus etc for fertilizer plant, crude petroleumrefinery and renovation, modernization of power generationplants, goods for fertilizer projects, coal mining projects andpower generation projects has also been reduced from 16percent to 14 percent.Most infrastructure projects do not have output service tax orexcise duty liability. The excise duty on inputs consequentlybecomes a cost to the projects. Reduction in the peak ratewould reduce the cost of infrastructure projects which arecurrently not eligible for procurement of inputs at a concessionalrate of tax.indiaBUDGET200859