INDIA’S BUDGET 2013

             NEW DELHI: Sports utility vehicles, imported cars and motorcycles, high-end mobile phones, eating out at air-conditioned restaurants and cigarettes will become costlier with Finance Minister P Chidambaram deciding to impose higher taxes on these items.

On the other hand, there is good news for ladies as far as jewellery is concerned as they will be allowed to bring more duty free gold items provided they have stayed out of India for more than year.

Moreover, branded apparels will become cheaper as there will be zero excise duty on the item. Carpets and other textile floor coverings of coir or jute will also become less expensive as they have been fully exempted from excise duty.

In his Budget proposals for 2013-14, Finance Minister P Chidambaram said excise duty on Sports Utility Vehicles (SUV) will be raised to 30 per cent from 27 per cent.

"SUVs occupy greater road and parking space and ought to bear a higher tax... However, the increase will not apply to SUVs registered as taxis," Chidambaram said.

Targeting the "affluent class in India that consumes imported luxury goods such as high end motor vehicles, motorcycles, yachts and similar vessels", he said: "I am sure they will not mind paying a little more."

Subsequently, basic customs duty on new passenger cars and other motor vehicles (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.

Likewise, duty on yachts and similar vessels has also been raised to 25 per cent from 10 per cent.

                In a blow to mobile handset makers, excise duty on instruments priced above Rs 2,000 has been raised to six per cent but the concessional excise duty of one per cent and has been kept unchanged in the case of low priced phones.

Smokers will also have to shell out more for their puffs with Chidambaram training his eyes on them for more tax revenues.

"What does a Finance Minister turn to when he requires resources? The answer is cigarettes. I propose to increase the specific excise duty on cigarettes by about 18 per cent. Similar increases are proposed on cigars, cheroots and cigarillos," he said while delivering the Budget speech.

Eating out at air conditioned restaurants will also become more expensive with the Finance Minister bringing it under the purview of service tax. At present, service tax of 12 per cent does not apply to A/C restaurants that do not serve liquor.

"The distinction is artificial, and I propose to levy service tax on all air conditioned restaurants," he said.

Consumer Items	Impact (Positive or Negative)	Budget Measure
Television set-top boxes	Negative	Customs duty on imported set-top boxes increased from 5% to 10%
Mobile Phones worth more Rs 2000	Negative	Increase in excise duty to 6%
Silk & silk products	Negative	Increase in the customs duty on raw silk from 5% to 15%
Cigarettes and tobacco products	Negative	Increase in the specific excise duty on cigarettes to about 18%. Similar increases are proposed on cigars, cheroots and cigarillos.
Branded Non-Allopathic medicines	Positive	An abatement of 35% on the excise duty on MRP based assessment in respect of branded medicaments of Ayurveda, Unani, Siddha, Homeopathy and bio-chemic systems of medicine
Imported Jewellery	Positive	Duty-free limit on imported jewellery raised to Rs 50,000 in the case of a male passenger and Rs 100,000 in the case of a female passenger
Ready-made Garments	Positive	Zero excise duty' for cotton and manmade sector (spun yarn) at the yarn, fabric and garment stages
Eating Out	Negative	Service tax levied on all air conditioned restaurants
Sports Utility Vehicles (except taxis)	Negative	Excise duty on SUVs increased from 27% to 30%
Environment-friendly vehicles	Positive	The period of concession now available for specified parts of electric and hybrid vehicles extended upto fiscal 2015
Imported Luxury Vehicles	Negative	Increase in the customs duty on imported motor vehicles from 75% to 100%; on motorcycles with engine capacity of 800cc or more from 60% to 75%; and on yachts and similar vessels from 10% to 25%
Home Furnishing and Decor	Positive	Handmade carpets and textile floor coverings of coir or jute exempted from excise duty
Housing Construction	Negative	Increase in the excise duty on marble from Rs 30 per sq. mtr to Rs 60 per sq mtr.
High-end Homes	Negative	For buildings having homes and flats with a carpet area of 2,000 sq.ft. or more or of a value of Rs 1 crore or more, reduction in the rate of abatement on the service tax from 75% to 70%.