The much speculated and debated Union Budget 2013 has finally arrived! Here is what gets Cheaper and what will require shelling out those extra pennies!
Things to cost more!!
Driving a Sports Utility Vehicle will cost anotch more than before owing to the fact that driving one takes more space on the road and for parking! The excise duty on Sports Utility Vehicles (SUV) will be raised to 30 per cent from 27 per cent. SUVs registered as taxis are exempted from the same.
Customs duty on new passenger cars and other high-end cars costing more than USD 40,000 and/or engine capacity exceeding 3,000cc for petrol run vehicles and exceeding 2500 cc for diesel run vehicles has been hiked 100 per cent from 75 per cent earlier. High end motor vehicles, motorcycles, yachts and similar vessels also become costlier as duty on yachts and similar vessels has also been raised to 25 per cent from 10 per cent. Import duty on motorcycles above 800cc will go up from 60 per cent to 75 per cent.
Eating out at air conditioned restaurants also gets expensive. A/C restaurants that do not serve liquor come under the 12 per cent service tax umbrella.
Mobile handsets priced above Rs 2000 will attract an excise duty six per cent however the concessional excise duty of one per cent remains unchanged for low priced phones.
Silk clothes made using imported raw materials will become expensive as customs duty on raw silk of all grades has been increased to 15 per cent from 5 per cent.
Smoking too gets expensive with specific excise duty on cigarettes at about 18 per cent. Similar increases are proposed on cigars, cheroots and cigarillos.
Things to get Cheaper!!
Branded apparels will become less expensive as there will be no excise duty them. 10 per cent excise duty was levied on 30 per cent of the maximum retail price last year.
Textile ministry has been allocated Rs 50 crore for establishing apparel parks.
More duty free gold items can be brought to India by those who have stayed out of India for over a year. For a lady passenger the limit moves upto Rs 1 lakh from Rs 50,000 and for a male passenger, this has been raised to Rs 50,000 from Rs 10,000.
Precious stones will become cheaper as the basic customs duty has been cut to two per cent from 10 per cent on pre-forms of precious and semi-precious stones.
Carpets and other textile floor coverings of coir or jute will also become cheaperas as they have also been exempted from excise duty.
Imported hazel nuts becomes cheaper as the customs duty has been reduced to 10 per cent from 30 per cent. Dehulled oat grain also becomes less expensive as customs duty has been cut to 15 per cent from 30 per cent earlier.
Ramesh Srinivas, Partner, KPMG says, “The increase in budgetary allocations for rural development, agriculture and allied infrastructure, medium and small scale enterprises, food security and skills upgradation will benefit rural consumption. The key sectors that will benefit are FMCG, durables and agribusiness including agri-inputs, agro-logistics, food processing and textiles. The revision in indirect taxes will have a minor impact on some sectors such as food services, cigarettes, mobile phones while overall private consumption will be largely unaffected as there have not been any major changes in the direct taxes regime.”
Sunil Duggal, CEO, Dabur India Ltd says, "Given the fact that this year's Budget comes against the backdrop of the slowest economic growth in a decade, the Finance Minister has missed the opportunity to give that much-needed booster dose for growth. In fact, the absence of any big-bang negative proposal in this year’s Budget can be seen as a big positive.
There have some been some feel-good moves in the form of special schemes for three key sections of the society, i.e. Women, Youth & Poor, in addition to greater thrust on Infrastructure and higher spends on Food Security. It is also heartening to see that the government is finally moving ahead with the introduction of Goods & Services Tax (GST) and the proposal for balance CST compensation to the States is a move in the right direction.
While steps like Rs 2,000 relief to taxpayers in the Rs 2-5 lakh bracket and Rs 1 lakh additional relief on home loans of up to Rs 25 lakh would certainly put more disposable income -- howsoever little -- in the pockets of the common man, but these were much below expectations. Given the continued Inflation, there is very little real relief and cheer for the common man.
I am quite happy with the government’s continued focus on rural India. The decision to extend interest subvention scheme for short-term crop loans, higher allocation for National Rural Employment Guarantee Scheme are big positives which would surely go a long way in putting more money in rural pockets and improving their standards of living. This would, in turn, ensure continued rural demand."
Anil Mathur, COO, Godrej Interio says, "The overall view is that is a good to an average budget. Its a good move that the fiscal deficit has been contained and that will give an impetus to the economy. It’s a step in the right direction of increasing the investment in Infrastructure for the manufacturer. It helps in the development of the industry for the future specially from the view of the economic constraints faced today. The additional tax incentive on home loans interest will help the investment by the middle class in buying their own homes. Also, the additional investments in health care and education sectors will see a growth in these sectors and we hope that this investment is used to get the right skills developed ."