Millennium Post

Union budget: Smoking, eating out, air travel to be costlier

Union budget: Smoking, eating out, air travel to be costlier
Those which will turn cheaper include leather footwear, locally made mobiles, computer tablets, microwave ovens, peanut butter, packaged fruits, ambulance service and agarbattis.

Continuing the trend set by his many predecessors, Finance Minister Arun Jaitley today came down heavily on smokers and tobacco consumers with a steep increase in excise rate in tax proposals in Budget 2015-16.

Citing need for promotion of public health, Jaitley said: "Excise duty on cigarettes is being increased by 25 per cent for cigarettes of length not exceeding 65 mm and by 15 per cent for cigarettes of other lengths. Similar increases are proposed on cigars, cheroots and cigarillos."

He made changes to the compounded levy scheme applicable to pan masala, gutkha and certain other tobacco products.

As per the Budget proposals, excise duty on cut tobacco is being increased to Rs 70 per kg from Rs 60 per kg earlier.

On the increase of Service Tax, Jaitley said: "To facilitate a smooth transition to levy of tax on services by both the Centre and the States, it is proposed to increase the present rate of service tax plus education cesses from 12.36 per cent to a consolidated rate of 14 per cent."

Subsequently, eating out at restaurants, stay in hotels, air travel, cable and DTH services, visiting beauty parlours, courier service, credit and debit card related services, dry cleaning of clothes, stock broking, asset management and insurance and a host of other activities that require availing of service from another party will become expensive.

Jaitley, however, spared the common man from price hikes on many commonly used day-to-day items by reducing duties.

Leather footwear priced above Rs 1,000 per pair will cost less as excise duty has gone down to 6 per cent from 12 per cent earlier.

Packaged fruits and vegetables will also become cheaper as pre-cooling, ripening, retail packing and labelling of these items have been exempted from service tax.

Similarly excise duty on locally made mobile phones, LED/ LCD panels, LED lights and LED Lamps have been cut.

Microwave ovens are likely to become cheaper as a key component, magnetron, has been exempted from basic customs duty as compared to 5 per cent earlier. Refrigerator prices could also come down as import duty on various components have been reduced.

Similarly, solar water heater will be less expensive with excise duty on the item has been changed from 12 per cent to nil without CENVAT credit or 12.5 per cent with CENVAT credit.

Agarbattis prices will come down as it will now attract nil excise duty with Jaitley announcing "full exemption from excise duty is being extended to captively consumed intermediate compound coming into existence during the manufacture of Agarbattis".

Prices of pacemakers are expected to come down as specific materials used in its manufacturing have been exempted from duties.

Ambulance and ambulance services are also expected to come down as excise duty on chassis of such vehicle has been cut to 12.5 per cent from 24 per cent, while all ambulance services provided to patients are being exempted from service tax.

A visit to museum, zoo, national park, wild life sanctuary and tiger reserves will also become pocket friendly with the Finance Minister exempting such activities from the service tax.

Union budget: Air travel becomes costly, AI to get Rs 2500 cr

First and business class air travellers would find flying costlier from the next fiscal with an almost 2 per cent hike in service tax rate proposed in the general budget, which also earmarked Rs 2,500 crore for ailing Air India in 2015-16.

Union Finance Minister Arun Jaitley announced hike in service tax from 12.36 per cent to 14 per cent for travel by air in first and business class in the Budget, making it costlier.

The total plan allocation for the Civil Aviation Ministry stands at Rs 5,360.95 crore and its non-plan expenditure estimated at Rs 621.50 crore.

Air India has been allocated Rs 2,500 crore as equity infusion during the year.

Saddled with a massive Rs 40,000 crore debt and combined losses of Rs 36,000 crore till last fiscal, the airline is surviving on a government bailout package, announced earlier.

As part of a turnaround and financial restructuring plan approved by the government in 2012, Air India will get equity infusion of Rs 30,000 crore till 2021.

State-owned airport operator, Airports Authority of India has been provided with budgetary support of Rs 80 crore in the budget out of which Rs 22 crore has been allocated for Pakyong airport project in Sikkim.

Besides, civil aviation regulator -- Directorate General of Civil Aviation -- has been allocated Rs 50 crore to carry out its plan schemes under the overall budget of Rs 5,360.95 for the Civil Aviation Ministry.

The Bureau of Civil Aviation Security has been allocated Rs 40 crore.


    Yoga included in the ambit of charitable purposes under the Income Tax Act.

    Individual tax payer will benefit to the extent Rs 4,44,200 from the exemptions announced.

    Government to reduce custom duty on 22 items.

    Black money: 6 months for voluntary disclosure?

    Quoting PAN a must for all purchases above Rs 1 lakh.

    Corporate tax reduced from 30% to 25% over next four years

    Are you satisfied with the Budget? Write in your reactions here

    Defence allocation for this fiscal is Rs 2,46,727 crore.

Next Story
Share it