Press Information Bureau

Government of India

Ministry of Finance

16-March-2012 14:13 IST

Excise Duty on ‘Demerit’ Goods Hiked as a Measure for Additional Resource Mobilisation

The Union Budget 2012-13 proposes to increase excise duty on ‘demerit’ goods such as certain cigarettes, hand rolled bidis, pan masala, gutka, chewing tobacco, unmanufactured tobacco and zarda scented tobacco. While presenting the Budget in Parliament today, the Finance Minister Shri Mukherjee proposed to enhance cess on crude petroleum oil produced in India to Rs. 4500/- per metric tonne from Rs. 2500/- per metric tonne under the COIL Industries Development Act.

In order to further garner additional resources, the Finance Minister has proposed to enhance basic customs duties on completely built units of large cars/ Multi-Utility Vehicles/ Sports Utility Vehicles having engine capacity above prescribed threshold from 60 percent to 75 per cent ad valorem.

DSM/YSK/nb/15

Excise duty increase on demerit goods raises taxes on tobacco, pan masala and related products nationwide. The Budget raises central excise levies on specific tobacco and tobacco-related 'demerit' products, including certain cigarettes, hand-rolled bidis, pan masala, gutka, chewing tobacco, unmanufactured tobacco and zarda scented tobacco, to increase fiscal resources. It also enhances the cess on crude petroleum produced in India under the relevant industry development statute and increases the basic customs duty on completely built units of large cars/MUVs/SUVs above the prescribed engine-capacity threshold to a higher ad valorem rate.