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Budget 2013: What gets cheaper and what just got dearer

By Lohit Jagwani

  • 28 Feb 2013

The general drift of the Union Budget is higher burden on the rich and some sops for the poor or rather those in the lower income group. This holds true for budget proposals across different areas including income tax liability, as well as the things one buys or the services you avail.

VCCircle brings a snapshot of what affects you as a consumer.

What’s costlier?

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Planning to get the latest sports convertible from Europe or the Harley Davidson beast or the shining new yacht to boast your weekend hobby? Get ready to pay more as import duty on automobiles has been increased from 75 per cent to 100 per cent (so pay twice the actual price to cruise in India). Similarly, duty on imported motorcycles with engine capacity of 800cc or more will rise from 60 per cent to 75 per cent. And duty on imported yachts will increase from 10 per cent to 25 per cent (thinking of getting a 20-seater private jet, anyone?). But it’s not just the super luxury cars which have got costlier. Excise duty on fuel-guzzling sports utility vehicles (SUVs) has been hiked from 27 per cent to 30 per cent. However, it won’t be applicable for SUVs registered as cabs.

If you are the strong one who is not swayed by pugnacious images of cancer patients that come with your cigarette packs, here’s another reason to kick the habit. The evergreen target of higher taxes has managed to attract an extra special excise duty of 18 per cent. Hold on, it’s also applicable to your cigars, cheroots and cigarillos!

Eating out, well most of it, is going to cost more. Till date, service tax is only charged at air-conditioned restaurants serving liquor. But now, the government has made service tax mandatory for all AC restaurants.

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Rebuilding your house? Trying to replace the old tiles with marbles? The excise duty on marbles has been hiked to shell out more.

If you love to flaunt your smartphone, get ready to pay more as you replace your existing handset. Mobile phones costing more than Rs 2,000 will attract higher tax.

Been waiting for the interest rate to come down to buy the new luxury apartment? You may gain some with the impending cut in interest but the actual price of the flat has just gone up a notch for homes valued over Rs 1 crore as the government has decided to reduce the abatement from 75 per cent to 70 per cent for homes with a carpet area of 2,000 sq. ft. or more or costing over Rs 1 crore.

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Television viewing can get costlier with higher import duty on set-top boxes. Although aimed at helping domestic STB manufacturers, the bulk of such boxes you see with your DTH connection or digital cable come from overseas makers and it may see a small hike in cost as the import duty on STB has been increased from 5 per cent to 10 per cent. Currently, the cost of STBs is subsidised by DTH operators but with piling losses, this may be passed on to users.

Now a few droplets of good news…

The government has extended tax concessions for specified parts of electric and hybrid vehicles for the next two years which means the cost for such environment-friendly vehicles may not go up soon.

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Part restoration of the ‘zero excise duty’ regime for cotton fibre may enable garment-makers for the ‘common man’ to cut costs. But how much of that will actually translate into actual price benefit for the consumer is anybody’s guess, given the poor state of the textile sector.

Handmade carpets and textile floor coverings of coir or jute will have no excise duty.

Branded alternative medicines such as ayurveda and homoeopathy will have MRP-based assessments which may lead to reduction of duty and price benefit for consumers or rather, the patients.

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(Edited by Sanghamitra Mandal)

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