IMPACT OF BUDGET 2013-2014BYS.DOUGLAS ASIRVATHAM.
TOBACCO PRODUCTS.1. Smoking is going to be costlier bymore than 15%, with the budgetincreasing taxes on regular-sized cigarettes and cigars by18%.2. As per industry estimates, whilecigarettes contribute nearly 75% ofthe tax revenues generated by thetobacco sector, it accounts for lessthan 15% of tobacco consumptionin the country.
SUV’S,MOBILE PHONE AND SET TOP BOX.1. Excise duty on SUVs would be increased from 27 to 30percent, but added that excise duty would not apply to SUVsregistered as taxies.2. Duty on mobile phones priced above Rs. 2000, he said, hasbeen raised to six percent from the current one percent.3. Custom duty on Set Top Boxes increased from 5 to 10percent.
GOLD IMPORT DUTY AND TAXES SPARED.1.To the surprise of many finance minister in his budget sparesthe import duty on gold .2.And no more taxes were imposed on gold import.3.Though prior to budget import duties were increased from 4 to6 percent for gold in the month of january.
TAXING THE SUPER RICH.1. Giving small relief to income tax payers, Finance Ministerannounced a credit of Rs 2,000 for persons with income up toRs 5 lakh.2. In order to generate more tax revenue, the Union Budget hasdecided to increase the tax liability of the rich by levying asurcharge of 10% on taxable income that exceeds Rs.1 crore.This one-time surcharge, which is applicable only for theassessment year 2014-2015, will be in addition to theeducation cess of 3% that is paid on total income-tax.3. An additional surcharge of 10% is likely to impact only about42,800 taxpayers, who are currently earning an annualincome above Rs.1 crore.
UNCHANGED TAX SLAP VEXES MANY.Income RangeGeneral(non-seniorcitizens)CategoryWomen (Below 60 years ofage)(This category is abolishedfrom this year and is thus issame as that of GeneralCategorySenior Citizens(Men and Womenabove 60 years ofage), but below 80yearsVery SeniorCitizens (Menand Womenabove 80 yearsof age)Upto Rs. 2,00,000 Nil Nil Nil NilRs. 2,00,001 to Rs. 2,50,000 10% 10% Nil NilRs. 2,50,001 to Rs. 5,00,000 10% 10% 10% NilRs. 5,00,001 to Rs. 10,00,000 20% 20% 20% 20%Above Rs. 10,00,000 30% 30% 30% 30%
AVIATION INDUSTRY.Among the many things that this industry asked the government lookinto, the following emerges as the most important ones:1. a) Declaring Jet fuel as a notified commodity so that the taxes areconsiderably reduced – from as high as 26 per cent to 4 per cent.The price of Jet Fuel or ATF varies between states since it is subjectto Sales Tax and Sales tax is a State subject under the IndianConstitution.2. b) Doing away with Service tax in tour and trade. Tours andTourism attracts service tax of 12.5 per cent. And the Industry was ofthe opinion that this was hurting the tourism industry.3. c) Promoting regional connectivity by developing airport sin Tier-II and Tier III cities.4. d) Relief to MRO (Maintenance, Repair and Overhaul) Services inTax.
AVIATION INDUSTRY.The budget has not addressed any of the above except for aminor correction in the duty- free period for import of spares andtest equipment for MRO. The budget has increased the timeperiod for consumption or installation of parts and testingequipments imported for maintenance, repair and MRO ofaircrafts by units engaged in such activities form the existingthree months to a year.
AGRICULTURE SECTOR.1. For a fast track growth of agriculture, which showed 1.8% growth thisyear despite bad monsoon, the total plan outlay for agriculture hasbeen increased by 22 per cent from Rs Rs 20,208 crore to 27,049crore. This will support the new initiatives announced in the budgetbesides backing the existing programmes which have resulted intorecord food grain production this year.2. "Agriculture contribute 14.1% in the total GDP but still more than58% of the population rely on farm for livelihood. This booster willhelp agriculture grow and attain the targeted growth rate of 4%.
MANUFACTURING SECTOR.1. To spur local electronics manufacturing, Finance Minister PChidambaram offered sops to chip makers to set up base inIndia. The industry, though, considered the act a good startbut far from sufficient.2. .While presenting the Union Budget for 2013-14, Chidambaram said the Indian government will waivecustoms duty for plants and machinery in the semiconductorsector.3. While India is home to semi-conductor designing, very littlemanufacturing is done in the country. The Indiansemiconductor design market is expected to grow to $14.5billion (Rs 78,200 crore) in 2015
SCIENCE AND TECHNOLOGY.1. The government announced setting up of a Rs 2,000-crorefund to help encourage and finance such products. Presentingthe General Budget in Lok Sabha, Finance Minister said thatMinistry of Science and Technology, Ministry of Finance andPrincipal Scientific Advisor to the Government have identifieda few amazing science and technology innovations.He said the government has decided to fund organisationsthat will scale-up and make these products available to thepeople.
IT MODERNISATION.1.Government has allocated Rs 532 crore for IT Modernisationproject of Post offices.2."Post offices will become part of the core banking solution andoffer real time banking services. I propose to provide Rs 532crore for the project in 2013-14," Finance Minister PChidambaram said while presenting the Budget proposals for thenext fiscal in Parliament.