Using tobacco products in any form is going to be very costly as Finance Minister Arun Jaitley on Thursday proposed a steep hike in duty on cigarettes and also made pan masala, gutkha, chewing tobacco and aerated drinks containing sugar, costlier.
While presenting the Union Budget for 2014-15, Jaitley proposed to increase the specific excise duty on cigarettes in the range of 11 per cent to 72 per cent.Excise duty has been increased by 72 per cent on cigarettes of length not exceeding 65 mm and by 11 per cent to 21 per cent for cigarettes of other lengths. Similar increases have also been proposed on cigars, cheroots and cigarillos.
likewise, excise duty on pan masala has been increased to 16 per cent from 12 per cent, unmanufactured tobacco to 55 per cent from 50 per cent; gutkha and chewing tobacco to 70 per cent from 60 per cent.The Finance Minister also proposed to levy an additional duty of excise at 5 per cent on aerated water containing added sugar.“These are healthy measures and I hope everyone would welcome them from the point of view of human and fiscal health,” Jaitley said.
On the other hand, traditional colour television and new lED/lCD TVs, especially those below 19 inches, personal computers, e-book readers, low cost footwear, lED lights, water purifiers using reverse osmosis (RO) technology are some of the items that are set to become cheaper due to reduction in different taxes and duties.
As the Government has already extended excise duty concessions beyond June 30, 2014, for a period of six months up to December 31, 2014, for capital goods, consumer durables and the automobile sector, prices of these items will remain unchanged. Jaitley, however, made it easier for consumers in the lower end of the spectrum, who still watch traditional TVs, by exempting colour picture tubes from basic customs duty.
“Cathode ray TVs are used by the economically weaker sections who cannot afford to buy more expensive flat panel TVs. The duty concession will help revive manufacturing of TVs in the Small and Medium sized Enterprises (SME) sector and create employment opportunities,” Jaitley said.
The Finance Minister further said: “At the same time, to encourage production of lCD and lED TVs below 19 inches in India, I propose to reduce the basic customs duty on lCD and lED TV panels of below 19 inches from 10 per cent to nil. Further, to encourage manufacture of lCD and lED TV panels, I propose to exempt from basic customs duty specified inputs used in their manufacture.”
Cost of HIV/AIDS medicines and diagnostic kits for AIDS, TB and malaria will go down with full exemption from customs duty.To provide relief to the footwear industry, most of which are in the SME sector, Jaitley proposed to reduce excise duty from 12 per cent to 6 per cent on footwear of retail price exceeding Rs500 per pair but not exceeding Rs1,000 a pair.“Footwear of retail price up to Rs500 per pair will continue to remain exempted,” he said.
Personal computers, laptops and tablets are also set to be cheaper as the special additional duty on all inputs and components used to manufacture these items has been exempted.Similarly, e-book readers will become cheaper as they will no longer attract basic customs duty as against 7.5 per cent earlier. Excise duty on metal core and PCB driver used to manufacture lED lights, lamps and fixtures has been reduced from 10-12 per cent to 6 per cent, thus making it more affordable.
Water purifiers using RO technology will also become cheaper as excise duty on RO membrane element has been reduced to 6 per cent from 10-12 per cent earlier.