Brokerage expectations from 2008/09 budget

MUMBAI, Feb 22 (Reuters) - Following is a snapshot of
analysts' expectations from the federal budget compiled from
brokerage reports.
Indian Finance Minister Palaniappan Chidambaram will present
the budget for 2008/09 on Feb 29.

AUTOMOBILES
------------
- Uniform excise duty rates of 16 percent for all cars, large
and small.
- Reduction in excise duty on two wheelers to 12 or 8 percent
from 16 percent.
- Reduction in the excise duty on buses to 16 percent from 24
percent.

BANKING
---------
- Raising FII/FDI limit in state-run banks to 49 percent from
20 percent.
- Relaxation in the lock-in period to three years from five
years for bank deposits to qualify for tax benefits.
- Interest earned on long-term lending to infrastructure
industries to be exempted from income tax.

CAPITAL GOODS
-------------
- Reduction in excise duty on air conditioners meeting energy
efficiency guidelines to 8 percent from 16 percent.
- Reduction in excise duty on power equipment to 8 percent
from 16 percent.
- Rationalisation of tax structures with respect to dividend
paid by subsidiaries and special purpose vehicles.

CEMENT
-------
- Abolish the 5 percent import duty on coal and pet coke.
- Value Added Tax on cement and clinker be reduced and
brought in line with similar construction materials, like steel,
to 4 percent from 12.5 percent.

CONSUMER GOODS
--------------
- Excise exemption on biscuits similar to other food mixes
granted exemption in the last budget.
- Reduction in excise duty on processed foods to 8 percent
from 16 percent.

FERTILISER
----------
- Removal or reduction of customs duties on inputs like
liquefied natural gas.
- Reduction in customs duty on sulphuric acid to 5 percent
from 7.5 percent.
- General sales tax exemption for basic raw materials like
natural gas, naphtha, etc.
- Reduction in excise duty on pesticides to 8 percent from 16
percent.

HEALTHCARE
----------
- Infrastructure status for hospitals with certain
eligibility norms.
- Relaxation of income tax for mergers and acquisitions with
conditions.

HOTELS
-------
- Raising depreciation on hotel buildings to 20 percent from
10 percent.

INFORMATION TECHNOLOGY
----------------------
- Extension of Software Technology Park scheme, which is set
to end by 2008/09.
- Reduction in excise duty on personal computers to 8 percent
from 12 percent.
- Abolish excise duty of 8 percent on packaged software sold
over the counter.

LOGISTICS
----------
- Infrastructure status for warehousing and shipping
industry.

MEDIA
-----
- Abolish custom duty on digital exhibition equipment.
- Abolish 16 percent excice duty on set-top boxes.

METALS
-------
- Reduce excise duty on long steel products to 8 percent from
16 percent.
- Abolish 5 percent customs duty on import of scrap.
- Increase in export tax to 2,500 rupees per tonne from 1,500
rupees on key raw materials for steel.

OIL & GAS
----------
- Cut in excise duty on petrol and diesel.
- Removal of service tax on exploration activities.

PHARMACEUTICALS
---------------
- Reduction in maximum retail price-based excise duty to 8 or
12 percent from 16 percent.
- Excise duty exemption for all the 354 drugs specified in
the national list of essential medicines.
- Research & development tax exemption given to generic
pharmaceutical companies to be extended to the hived off, pure
play R&D companies.
- Life saving drugs to be exempted from customs duty of 5-10
percent.

POWER
------
- Extension of tax holidays for ultra-mega power projects
till 2017.
- Easing external commercial borrowing norms to enable
mobilisation of funds from abroad.
- Income tax exemptions for power infrastrcture bonds.
- Cut in excise duty on power equipment and other inputs to 8
percent from 16 percent.

RETAIL
--------
- Industry status to retail.

REAL ESTATE
------------
- Lowering the foreign direct investment threshold below
50,000 square-feet.
- Uniformity in stamp duty across states.
- Clarity on norms governing real estate investment trusts
with adequate tax benefits similar to mutual funds.

SUGAR
------
- Lowering of excise duty on ethanol to give a boost to the
mandatory blending with petrol.
- Uniform and lower sales tax among states.
- Excise duty structure on molasses of 750 rupees per tonne
to be replaced with an ad-valorem duty structure.

TEXTILES
---------
- Reduction of excise duty on man-made yarn to 4 percent from
8 percent.
- To allow contract labour.

- Reduction in license fees to a uniform 6 percent of
adjusted gross revenue.
- Removal of customs duty for telecoms equipment from the
current rates of 4-37 percent.
- Exemption of service tax on broadband services for the next
five years.

Collated from the reports of following brokerages: Batlivala &
Karani Securities, Edelweiss Securities, Kotak Securities,
Religare Securities and Sharekhan.


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