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How the rate of some duties increase immediately?

Almost every year we notice that some of the duties on cigarette, petrol, diesel, gas cylinder and some other items are increased immediately after the presentation of the Finance Bill. We know that a Bill has no force of the law and it cannot be enforced, then how the duties are immediately increased before a Finance Bill is passed as Finance Act. There is an act called the Provisional Collection of Taxes Act, 1931(16 of 1931) which is an act to amend the law providing for the immediate effect for a limited period of provisions in Bills relating to the imposition or increase of duties of customs or excise. Where a Bill to be introduced in Parliament on behalf of Government provides for the imposition or increase of a duty of customs or excise, the Central Government may cause to be inserted in the Bill a declaration that it is expedient in the public interest that any provision of the Bill relating to such imposition or increase shall have immediate effect under this Act. A declared provision shall have the force of law immediately on the expiry of the day on which the Bill containing it is introduced. It will cease to have the force of law in the following events: i) when the Act is passed, or ii) Parliament directs as such by notification, or iii) after the 75th day of its introduction. If the provision does not become law the duties collected shall be refunded.

Generally declaration under the Provisional Collection of Taxes Act, 1931 reads like “It is hereby declared that it is expedient in the public interest that the provisions of clauses .., Sl. Nos ... of the …Schedule…of this Bill shall have immediate effect under the Provisional Collection of Taxes Act, 1931." And such declared provisions have the force of law from the midnight following the day of presentation of budget.

ITKP on January 12 2015 16:46:35

Sir I have never read this anywhere. Really a nice information enriching our knowledge base.....
Thanks a lot sir

npssundar on January 19 2015 12:02:55

really good answer.

Pankaj Mehta on March 26 2015 15:49:05


Bandana Diwedi on April 06 2015 15:24:18

Thanks for adding to our knowledge base

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