Budget 2012: CII asks for continuation of 10% excise duty rate

In its Pre-Budget Memorandum to the Ministry of Finance, the Confederation of Indian Industry ( CII) has strongly recommended continuation of 10% standard rate of excise duty during 2012-13 which is applicable on most of the manufactured goods.

CII has pointed out that presently, in addition to 10% excise duty, there is state VAT of 12.5% to 14.5% and the combined affect of these two taxes varies from 24% to 26% which is quite high as compared to GST rates in most of the countries.

In the release issued on Wednesday, CII said that the manufacturing sector is the major contributor to excise revenue and as per index of industrial production for the month of December 2011 released by Central Statistics Office (CSO) on 10 February 2012 growth of this sector for April-December 2011 is 3.9% compared to 9.0% of corresponding period of the previous year. Growth figures of December 2011 have come down to 1.8% compared to 8.7% in December 2010.

With this scenario, CII is of the view that any increase in excise duty in the Union Budget 2012-13 would adversely affect the growth prospects of industry and result in higher cost to the consumer, in turn leading to inflation.