Friday, December 2 2005 19:01 Hrs (IST) - World Time -

New Delhi: Ruling out cut in excise duties on petroleum products as of now, the government today (December 2, 2005) said it was considering a "EET" system for taxing savings instruments only during withdrawals, as recommended by an expert panel.

"At present, there is no proposal under consideration of government to effect any change in Excise Duty structure and rates for petroleum products," Minister of State for Finance, S S Palanimanickam, said in a written reply to Lok Sabha.

He said the prices of petroleum products depend on a number of factors like international crude oil prices, domestic and international demand and supply position, duties and taxes.

On the proposed 'Exempt Exempt Tax (EET)' method of taxing savings instruments, the minister said: "In order to resolve a number of administrative issues, a committee of experts was set up to work out the roadmap for moving towards an EET method of taxation of savings instruments."

"The committee has submitted its report on November 28 and the same is under consideration of government," he said.

In his budget for 2005-06, Finance Minister P Chidambaram had announced the decision of the government to adopt the EET method in accordance with the best international practice.

On Banking Cash Transaction Tax, he said: "A number of banks had represented requesting the government to withdraw the BCTT on inter-bank transactions.

"It was never the intention of the government to tax such transactions. Therefore, the government amended the statute through Taxation Laws (amendment) Ordinance, promulgated on October 31, to provide that such transactions will be exempt from levy of BCTT," he said.