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Your monthly budget may have to be tweaked following the proposals announced in the Union Budget 2014-15. While your soap and detergents may become cheaper, aerated drinks that your children love to guzzle may become costlier. And to encourage your child to play sports, you can buy the latest sports gear, as sports gloves will now be cheaper.
The Finance Minister (FM) has proposed doing away with the customs duty on the raw materials used for making soap. Currently, the Basic Customs Duty (BCD) on fatty acids, crude palm stearin, RBD and other stearin and specified industrial grade crude oils used for manufacturing soaps and oleo-chemicals is at 7.5%. Similarly, BCD on crude glycerin used in the manufacture of soaps has also been reduced from 12.5% to nil.
In order to encourage a healthier lifestyle and discourage tobacco consumption, the FM has proposed increasing the specific duty on cigarettes, cigars, cheroots and cigarillo, in the range of 11-72%. Similarly, the excise duty on pan masala has been increased from 12 to 16%, duty on un-manufactured tobacco from 50 to 55% and on gutkha and chewing tobacco from 60 to 70%.
There is also an additional duty of excise at 5% on aerated waters containing added sugar, which could push up the prices of soft drinks.
"These are healthy measures and I hope everyone would welcome them from the point of view of human and fiscal health," Finance Minister Arun Jaitley said in the Budget speech.
To encourage sports, the FM has proposed concessional excise duty of 2% without Cenvat benefit and 6% with Cenvat benefit on sports gloves.
Garments, which use spandex yarn, could also become cheaper since specified inputs which are used in the manufacture of spandex yarn have been exempt from BCD.
Tinned fruits, packed fruit juice and packaged meat and poultry products could also see a reduction in price since the excise duty on specified food processing and packaging machinery has been reduced from 10% to 6%.
"The BCD on denatured ethyl alcohol has been reduced from 7.5% to 5%. Since this largely is used in the manufacturing of deodorants and cosmetics, the prices of these products could see a decrease," said Sumit Lunker, Partner – Indirect Tax, BDO India LLP.
Buying a personal computer for your family will also be cheaper since all inputs and components used in the manufacture of PCs has been exempt from 4% special additional duty. But imported electronic products will now attract education cess.
However, smaller televisions will be cheaper since the FM has proposed to do away with BCD on LCD and LED TVs below 19 inches. Even LCDs and LEDs which are more than 19 inches will become cheaper because the inputs used in their manufacture have been exempt from BCD.
For those who cannot afford LED or LCD TVs, the FM has proposed exempting colour picture tubes from BCD, which will make cathode ray TVs cheaper.
"The government wants to promote manufacturing in India," said Bipin Sapra, Tax Partner, EY.
If you are fond of shoes then you can indulge yourself provided the price of your footwear is less than Rs 1,000. The FM has proposed a reduction in excise duty from 12% to 6% on footwear if the retail price is between Rs 500 and Rs 1,000.
The Budget has proposed to withdraw the concessional excise duty (2% without Cenvat benefit and 6% with Cenvat benefit) on smart cards and levy a uniform excise duty at 12%.
Consequently, imports will attract higher CVD. This will help domestic industry, the FM said. This could impact prices of smart cards used in gaming zones at malls and pre-paid cards, Sapra said.
You will have to pay more for radio taxis, since they have been brought under the service tax net. "Service tax has also been introduced for rooms at a dharmashala or ashram, if the price is more than Rs 1,000. So, a pilgrimage may cost you more," said Lunker. Hiring an air-conditioned bus for sight-seeing will also now attract service tax.
