Car, fuel, AC, TV, gold and silver jewellery, cigarettes and other tobacco products will cost more in the new fiscal with Finance Minister Pranab Mukherjee proposing a hike in duties and change in tax structure on these items in the Budget for 2010-11.
As part of a partial withdrawal of stimulus measures, given the recovery seen in the economy, Mukherjee announced hiking excise duty on non-oil products to 10 per cent from 8 per cent across all sectors.
Within minutes, car manufacturers announced that they would hike prices while government officials said that petrol and diesel would cost Rs 2.67 and Rs 2.58 more per litre, respectively, from midnight tonight.
Perhaps, Mukherjee wanted to create more demand by giving more tax concessions and provide more money in consumers' hand so that they buy more and boost the industry and economy.
Prices of consumer durables and electronic items are set to go up, although mobile handsets made in India and accessories will see price cuts with the government providing exemption in customs duty on import of key components.
The Finance Minister also increased excise on petrol and diesel by Re one per litre, following which duty on branded petrol will now be Rs 15.5 per litre and that of branded diesel will be 5.75 per litre. Non-branded petrol will attract duty of 14.35 per litre and that of diesel will be 4.60 per litre.
Housing prices are also likely to go up as one of the key construction materials, cement will attract higher ecise duty with Mukherjee hiking excise rate on this commodity.
The Finance Minister proposed new excise rates ranging between Rs 185 per tonne to Rs 315 per tonne depending on the retail price of a 50-kg bag, a hike between Rs
and Rs 65 per tonne.
Electricity bills could also go up as the minister proposed bringing service provided by electricity exchanges under the ambit of service tax.
Jewellery will also see hike in prices with Mukherjee proposing to impose higher customs duty on imported gold, silver and platinum.
Duty on imported gold bar has been hiked to Rs 300 per 10 gram from Rs 200 earlier, while that of other forms of gold will now attract import cess of Rs 750 per gram, up from Rs 500 per gram earlier.
Imported silver jewellery will attract customs duty of Rs 1500 per 1000 kg (up from Rs 1000), while that of platinum will now be at Rs 300 per 10 gram (up from Rs 200).
In bad news for smokers, excise rates have been revised upwards up to Rs 2363 per 1000 (barring cigarettes of less than 60 mm). Also, chewing-tobacco products will attract excise duty of 60 per cent as against the earlier 50 per cent.
For the salaried, health check-up undertaken by hospitals for the employees of business establishments will be expensive as the service will now be covered under service tax.
Moreover, health services provided under health insurance schemes by insurance companies will also be covered under service tax.
Computer parts, like micro-processors, floppy and flash drives, hard disk and external drives too will cost more as the Finance Minister has decided to withdraw exemption on excise duty and impose four per cent on these items.
However, toy balloons, quilted textile materials, mentha oil, pepper mint will become cheaper as these items have been exempted from excise duty.
Water filters, except those working on reverse osmosis technology, latex rubber thread and corrogated boxes will also be cheaper as excise rate has been cut to 4 per cent from 8 per cent.
Fancy goggles (sun glasses) would become costly as the government has imposed a duty of 10 per cent. However, glasses used for correcting are exempted from it.
The government has also imposed service tax on the copy rights of sound recording and cinematography films. However, copyright on original dramatic and artistic work are exempted. PTI
