Date:04/03/2006 URL: http://www.thehindu.com/2006/03/04/stories/2006030402990500.htm

Tamil Nadu - Chennai

Hire purchase federation welcomes budget proposal

Staff Reporter

CHENNAI: The 2006-07 budget proposals on road infrastructure development, completion of golden quadrilateral project and reducing the excise duty on small cars would benefit companies engaged in hire purchase and lease transactions.

Stating this Kailashmull Dugar, president, Federation of Indian Hire Purchase Associations, said the proposal to exempt 90 per cent of the interest earned from hire purchase and lease transactions from service tax was also welcome.

The industry, however, was expecting a full exemption.

It was also disappointed at the budget being silent on the demand that non-banking finance companies be treated on par with banks and financial institutions under the Income Tax Act and the SARFAESI Act.

Describing the reduction of customs duty on plastic raw materials from 10 to 5 per cent as a "farsighted" proposal, the Tamil Nadu and Pondy Plastic Association president G. Sankaran said the introduction of a four per cent countervailing duty was, however, disappointing.

"This has a nullifying effect ... what is given through the right hand has been taken away back by the left," he said in a press release.

The absence of any announcement to increase the excise duty exemption limit for small scale industries was also disappointing.