Retail: CST cut from 3% to 2%

What the Budget does

• The Finance Minister has been silent on proposals for the retail industry.
• Central Sales Tax rate being reduced from 3% to 2% from April 1, 2008.
• Customs duty being reduced on specified machinery from 7.5% to 5% to provide fillip to the manufacture of sports goods; duty also being exempted on specified raw materials for sports goods.
• Customs duty to be exempted on rough cubic zirconia and to be reduced on polished cubic zirconia from 10% to 5%, in order to encourage value addition and exports by gem and jewellery industry.
• Customs duty on rough coral being reduced from 10% to 5%.
• Threshold limit of exemption from personal income tax in the case of all assessees increased to Rs 150,000.
• Dividend tax paid by parent company allowed to be set off against the same paid by its subsidiary.

Also read: How Budget affects your stocks

• Impact on sector (limit to 150 words)
• Increase in the threshold limit of exemption from personal income tax to result in a rise in disposable incomes thereby fueling growth of the retailing sector.

Impact on companies

• Rise in disposable incomes due to the increase in the threshold limit of exemption from personal income tax will benefit companies like Shoppers' Stop, Pantaloon, Trent etc.

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