For the luxury sector, the Union Budget 2012-13, has brought higher excise and custom duties, making the products even more costly.
At a glance
• Gold and platinum will also become more expensive as the customs duty in imported standard bar has been hiked to 4 per cent from 2 per cent. The duty on non-standard gold bar has been hiked to 10 per cent from 5 per cent earlier
• Enhance the duty from 22 per cent to 24 per cent (large cars)
• Cars that attract a mixed rate of duty of 22 per cent plus Rs 15,000 per vehicle, the duty and switch over has been increased (according to value) to the rate of 27 per cent
• For import of completely built units (CBU) of large cars, multi and sports utility vehicles with cost exceeding USD 40,000 (Rs 2,000,000), per car custom duty will increase to 75 per cent from 60 per cent
Subhash Verma, Whole Time Director & CEO, Aerens Gold Souk Group
“Retail companies have gained value as the FM said that efforts are on to arrive at a broad based consensus on allowing FDI in multi-brand retail up to 51%. This will help in bringing more international brands in the country and cover both the ample retail space that we have on offer and the shortage of Indian grown brands. Moreover, the budget has fully exempted branded silver jewellery from excise duty but has imposed a 4% import duty on gold bars and gold ore, and 10% on platinum and coloured gems. This has led to a setback in the jewellery industry and the jewellers’ associations have planned for a three day nationwide bandh to protest against the new excise, custom duty and consumer tax on gold imports. Also, the downside of this increase in custom duty is that it will lead to trafficking of gold through illegal channels and will go down with the consumers as they would have to pay more duties. Lastly, the much awaited reduction/ abolition of Central Sales Tax (CST) would favourably impact the expansion of the organised retail by boosting/fulfilling their long-standing demand of benefits under Served From India Scheme (SFIS), similar to the incentives presently available to hotels, clubs and restaurants, ie, a 10% customs duty scrip on free foreign exchange earnings through international credit card sales to foreign nationals.”
Vinod Hayagriv, Managing Director, C.Krishniah Chetty & Sons
As an independent jeweler, I must say that this step is discouraging organised and progressive jewellers. We need laws that are trustful rather than penalising. Excise duty @ 1% on 30% of invoice value is a step in the wrong direction that will be detrimental and increase the inspector raj. Cash transactions over Rs 2 lakh are proposed for additional tax and will drive clients to the 'unorganised' sector. And clients will suffer quality issues. Jewellery will now cost more in India. Lastly, increase in customs duty will only encourage smuggling of precious metals. Hallmarking endeavours will suffer. "
Suhas Kadlaskar, Director (Corporate Affairs and HR), Mercedes Benz India
"The Budget is very disappointing for us. We were hoping for some reduction in taxes for large vehicles instead of hiking it further. The premium car makers usually bring in advanced technology in to the country and this step will be very counter-productive. We are going to pass on the additional burden to customers. We have not decided the exact amount yet, but on an average it will vary between Rs 2 lakh and Rs 3 lakh.