Finance Minister Pranab Mukherjee presented the Union Budget 2011-12 in Parliament on Monday. While the finance minister made the tax payers slightly happy by raising the exemption limit to Rs 180,000, he made many others unhappy.
So what has been the impact of this Budget on your daily life? Find out how what’s cheaper and what’s costlier after the Budget.
The Budget has made some items, including raw materials for syringe and needles, mobile parts and accessories like hands free headphones, incense sticks, sanitary nakpins and diapers, cheaper by reducing taxes.
Mobile phones to be costlier :- However, mobile handset prices will become more expensive as Finance Minister Pranab Mukherjee on Monday announced one per cent hike in the Central Excise duty for 130 items, including phones. Come April 1 and central excise duty on mobile phones will be raised from the current four per cent to five per cent.
Steel :- Steel prices to come down.
Items that will become cheaper also include solar lanterns.
Cars – Cars could either cost less or their prices might remain the same as the finance minister has not made any change in excise duty rates.
Hybrid cars – Duty reduced on hybrid & electric cars along with batteries imported for such vehicles.
Basic food – Basic food and fuel to be exempted from central excise duty.
Jewellery- Precious stones, gold and silver jewellery to be exempted from central excise duty. However, labelled jewellery will burn a deeper hole in the pockets as they will now attract one per cent excise duty.
LEDs -LEDs (light-emitting diodes) to cost less. Perhaps some electronic goods that require LEDs will cost less.
Raw silk- Basic customs duty on raw silk reduced from 30 to 5 per cent.
Farm equipment – Basic customs duty on agricultural machinery reduced to 4.5 per cent from 5 per cent.
Hotel accommodation -Service tax on hotel accommodation above Rs 1,500 per day. hotel stay will also become more expensive as rooms with a tariff of more than Rs 1,000 a day will attract an effective service tax of 5 per cent.
Branded clothes :- Branded clothes readymade garments will also become expensive as they will attract 10 per cent excise duty.
Air travel :- The Budget also proposed to raise service tax on air travel by Rs 50 in the case of domestic air travel and Rs 250 on international flight by economy class. Moreover, higher class travel in domestic sector will attract a service tax rate of 10 per cent bringing it on par with journeys by higher classes on international air travel.
Big hospitals: – With the finance minister proposing changes in service tax band, treatment in air-conditioned private hospitals, air travel and lawyer fees will cost more henceforth. The government has proposed to put all forms of payments — by individuals, insurance firms and business houses, for treatment in private hospitals with more that 25 beds and air conditioning facility under the service tax net resulting in an effective tax of five per cent.
Health check-ups: – Service tax net extended to include health check-ups.
Legal cases :- Legal cases will also become a costly affair with Mukherjee proposing to cover all legal consultations, except individual to individual, under the service tax net.
Liquor in chic restaurants – Drinking liquor in air-conditioned restaurants will also be more expensive as it will now come under the service tax net.
Ketchups, soups, etc – The proposals made by Finance Minister Pranab Mukherjee also mean that ready-to-eat food items, such as ketchups, soups, mudis (puffed rice), coffee and tea mixes, flavoured milk, supari will be dearer as they will now attract higher excise duty.
Notebooks, text books – According to the budgetary proposals, notebooks and exercise books, which were earlier exempted from excise duty will now attract one per cent duty without CENVAT credit facility. Moreover, a general effective rate of 5 per cent has been prescribed for these items and facilities.
Similarly, fountain pen ink, ball pen ink, geometry boxes, colour boxes and pencil sharpeners will also now attract a similar levy.
Educational text books are also expected to become costlier as paper used in printing them will no longer be exempted from excise duty.
Vaccines :- Vaccines, other than those included in National Immunisation Programme, will also register an increase as they will attract a concessional duty of one per cent without CENVAT credit facility.