New Delhi: In a major charm offensive to win over the middle class, the BJP will promise to rationalise all taxes, including personal income-tax, service taxes and excise duties on diesel and petrol, in its election manifesto.
The BJP is likely to promise to significantly raise the exemption limit on personal income-tax to rupees 5 lakh from the current level of rupees 2 lakh. This will bring huge relief to the salaried class, which is a core support base of the BJP, that has been burdened with high inflation.
In 2014, the BJP intends to do away with the education cess if it comes to power at the Centre. This will bring down the prices of a number of goods and services, including monthly mobile phone bills. The BJP is also likely to promise to bring down excise duty on petrol and diesel, which could bring down the prices of these two petroleum products. At present, for petrol, that costs around rupees 73.16 per litre in New Delhi, the excise and education cess component is around rupees 9.48 a litre. As far as diesel is concerned, the excise duty and education cess comes to rupees 3.56 per litre out of the total cost of the product of rupees 55.48 per litre (in Delhi).
The BJP manifesto is likely to promise rationalising service tax rates, and to remove it altogether from many services like hair cutting. In 2012, service tax in the country underwent a key change with the introduction of the negative list. While earlier only 119 services were taxed, from 2012 every service was taxable, barring 17 that were mentioned in the negative list. This meant that a number of people who were not paying service tax were brought under its ambit.
The BJP’s manifesto committee for the 2014 elections is headed by veteran party leader Murli Manohar Joshi and includes former finance ministers Yashwant Sinha and Jaswant Singh. To receive feedback from the public, the BJP has set up a website on which people can offer their suggestions.
