The Government
has amended the Central Excise Rules, 2002 and also revoked
its earlier instructions relating to the Budget Day restrictions
in respect of indigenously manufactured goods as well as imported
and exported goods. Thus, 28th of February this year
will be the first Budget Day when the manufacturers and importers
and exporters would be free to conduct their normal activities,
on this day.
Historically, the
Central Excise law imposed certain restriction on the clearance
of manufactured goods on the Budget Day. Similar restrictions
applied to the importing and exporting community including those
clearing the imported goods from customs bonded warehouses.
Essentially, in respect of central excise taxpayers it was provided
that they must declare their stock of manufactured goods on
the day preceding the Budget Day. Thereafter no goods were allowed
to be removed from a factory or warehouse on the Budget Day
upto 12 mid-might unless an application to this effect had been
made to the department and special permission obtained. The
permission was generally given to few goods such as those used
within the factory; petroleum products; goods for export; and
goods required to maintain essential services. The net result
of the Budget Day restrictions was that by and large no clearances
of other excisable goods (or imported goods) took place. Activity
of c! learance of imported and exported goods was likewise constrained.
The Budget Day
restrictions used to be imposed with the objective of preventing
duty evasion as the duty rates were normally enhanced. Moreover
on the central excise side duty used to be paid prior to clearance
of the goods but is now paid on instalment basis (fortnightly
by all units and monthly by small scale sector units). Thus,
the Budget Day restrictions appeared redundant and for this
reason the Task Force on Indirect Taxes chaired by Dr. Vijay
Kelkar had also recommended their revocation. The removal of
the Budget Day restrictions and resultant unhindered economic
activity is expected to impact economic growth positively.
