The government today effected an across-the-board four per cent cut in CENVAT (Central Value Added Tax) that will bring down prices of cars, cement, textiles and other goods as part of an economic stimulus package that also earmarks an additional Rs 20,000 crore for infrastructure, industry and export sectors.
In a virtual mini-budget that entails a revenue loss of Rs 8,700 crore in the next four months, the package seeks to revive the crucial housing, export, automobile, textiles and small and medium enterprises sector to counter the economic slow down caused by the global financial crisis and the recession in the West.
The three slabs of excise duty -- 14 per cent, 12 per cent and 8 per cent -- applicable to non-petroleum products have been reduced by 4 per cent each, an official release said today. The revised rates will be 10 per cent, 8 per cent and 4 per cent, respectively.
The package also contained full exemption from basic customs duty on industrial intermediate naphtha to give relief to power sector and withdrawal of export duty on iron ore fines while cutting down the levy on export of iron lumps from 15 per cent to five per cent.
The much-awaited package, set rolling by Prime Minister Manmohan Singh who is also the Finance Minister, targets power, exports, housing, auto, small and medium industries and infrastructure sectors through additional funding and guarantees that total an amount of over Rs 30,000 crore.