Budget 2016: Cheaper and Costlier

Cheaper and Costlier in Budget 2016

Cheaper and Costlier in Budget 2016

Every Union Budget introduces or alters taxes to encourage/discourage certain consumption. This in turn impacts the prices of products and services that we use in our daily lives. The post looks at the impact of budget 2016 on common man’s budget.

Costlier in Budget 2016:

Krishi Kalyan cess on Service Tax: Budget 2016 has introduced Krishi Kalyan cess of 0.5% on service tax. This would make service tax to 15% making all services where you pay service tax expensive. This includes dinning out, phone, broadband, watching movies in theaters etc. This cess is applicable from June 1, 2016. In last 1 year the service tax has been increased from 12% by 2% in last budget and then 0.5% swachh bharat cess and now 0.5% Krishi Kalyan cess.

Tobacco Products: The excise duty on various tobacco products have been increased to 10% to 15%. This would increase the cost of tobacco products like cigar, cigarette (other than beedi).

Cars: Additional 1% infrastructure cess on small cars running on petrol, LPG and CNG and 2.5% cess for diesel cars. For other higher engine capacity vehicles and sport utility vehicles (SUVs), this cess is 4%.

Luxury Cars: Tax deduction at source of 1% would be levied on cars with price tag of Rs 10 lakhs or more.

Precious Jewelry: Additional Excise duty of 1% without input tax credit (or 12.5% with input tax credit) has been levied on Precious jewelry (other than Silver)

Gold Bars: Countervailing and Excise duties increased to 8.75% and 9.5% respectively from 8% and 9% respectively

Imported Imitation Jewelry: Custom duty hiked from 10% to 15%

Soft drinks and mineral water: Excise duty hiked from 18% to 21%

Branded Garments: Additional excise duty of 2% without tax credit (or from 6% to 12.5% with input tax credit) on branded garments with retail price of Rs 1000 or more

Locally manufactured Mobile Phones & Tablets: would be costly by 1% as duty would be levied on imported circuit boards used in them

Air Travel: Increase in excise duty on aviation turbine fuel (ATF) to 14% from 8% and increase in Service tax

Legal services: Included in service tax list

Ropeway, cable car rides: Included in service tax list

Lottery tickets: Included in service tax list

Movers and Packers: Would attract service tax of 5.6% from 4.2% earlier

Electronic reading devices: Imposed custom duty of 7.5% from 0% earlier

Cheaper in Budget 2016:

Buying annuity under NPS: Service tax has been abolished on payment of premium for annuity under NPS

Low cost Houses: No service tax would be levied on low cost houses up to a carpet area of 60 square meters in a housing project of a government scheme

Braille paper: Custom duty cut from 10% to 0%

Solar lamps: Excise duty cut from 12.5% to 0%

Router, broadband modems, Set top boxes: Excise duty cut from 12.5% to 4%

Digital video recorders and CCTV cameras: Excise duty cut from 12.5% to 0%

Hybrid electric vehicles: Excise duty on Engine cut from 12.5% to 6%

Microwave ovens: Custom duty on magnetron of capacity 1 KW to 1.5 KW cut down from 10% to 0%

Dialysis: excise duty on disposable sterilised dialyser cut from 12.5% to 0%

Sanitary pads: Customs duties on key ingredients like wood pulp and super absorbent polymer have been cut by 2.5%

Footwear: Excise duty on rubber sheets and resin rubber sheets for soles and heels cut from 12.5% to 6%

Your Opinion Matters - Please Share below...