Budget 2007-08 dampner for industry: GCCI

Ahmedabad, Feb 28 (UNI) Since there are no significant positive policy announcements for propelling the economic boom, the Union Budget 2007-08 has not much to offer for Industry, Gujarat Chamber of Commerce&Industry (GCCI) today said.

It would be a challenge to the finance minister to sustain the growth impulses in the economy, GCCI said in a release issued here.

Welcoming the cut in peak rate of custom duty from 12.5 percent to 10 percent, it said the textile industry will benefit. The cut in custom duty from the current 10 per cent to 7.5 percent on manmade fibres is also welcome. Also the extension of TUF will greatly help the textile sector in its efforts towards modernisation, the release said.

Increasing the exemption limit from the present Rs four lakh to Rs eight lakh will greatly benefit small service providers. Though there would be a revenue loss of Rs eight crore on account of raising the exemption limit, it would be more or less offset due to inclusion new services in the net, the release added.

Welcoming steps to boost growth of pharma industry, the GCCI said that levy of five per cent concessional custom duty for R&D covering all institution and exempting new drugs meant for clinical trial from service tax will give boost to pharma sector growth.

Reduction in ad valorem duty on petrol and diesel from eight percent to six percent could check inflationary trends.

However, keeping the current inflationary trends in mind and high cost of economy, the exemption limit for the SSIs should have been substantially increased, GCCI felt.

Commenting on the direct tax front, GCCI said that mere increase of Rs 10,000 in personal income tax threshold limit will not make any difference and it would be neutralised through levy of one per cent additional educational cess.

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