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Monday, February 28, 2011

Union Budget 2011 Highlights: Indirect Taxation

  • Service tax widened to cover hotel accommodation above Rs.1,000 per day, A/C restaurants serving liquor, some category of hospitals, diagnostic tests
  • Service tax on air travel increased by Rs.50 for domestic travel and Rs.250 for international travel in economy class. On other higher classes, Service tax to be at 10%
  • Standard rate of excise duty held at 10 percent;
  • No change in CENVAT rates
  • Service tax rate unchanged at 10%
  • Iron ore export duty raised to 20 percent
  • Nominal 1% Central Excise Duty on 130 items entering the tax net
  • Basic food and fuel and precious stones, gold and silver jewellery to be exempted
  • Peak rate of customs duty maintained at 10%
  • Basic customs duty on agricultural machinery reduced to 4.5% from 5%
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