BUDGET - BMR Advisors

Indirect tax proposals for otherinfrastructure sectors – water andsanitation, roads and bridges, ports,railwaysExcise exemption to refrigeration equipmentTo further encourage cold chain facilities, exemption from exciseduty, on end-use basis for refrigeration equipment (consisting ofcompressor, condenser units, evaporator etc) above 2 TR (tonnerefrigeration) utilizing power of 50 KW and above has beenproposed.Excise exemption to composting machinesWith a view to introducing tax parity on similar goods, exciseduty on composting machines is proposed to be reduced from16 percent to nil.Impact of significant indirect tax proposals• Reduction in excise duty rates is likely to reduce cost ofinputs for execution of projects• Enhancement of excise duty on packaged software andimposition of service tax on information technology softwareand other information technology services is likely toenhance the project cost• Enhancement of service tax rate on works contract underthe composition scheme is likely to increase the cost ofexecution of projects• Reduction in the CST rate to 2 percent is unlikely to have anysignificant positive impact on this sector as most segmentsin this sector cannot issue Form C68indiaBUDGET2008