New Delhi: Almost all the manufactured items used in every day life will become costlier, while luxury cars, gold, eating out at restaurants or hotel accommodation will become even more expensive after a steep hike in tax rates proposed in Budget 2012-13.
Cigarettes and bidis will also become dearer as Finance Minister Pranab Mukherjee has proposed to tax these items more in the Budget for 2012-13.
With service tax being hiked to 12 per cent from the existing 10 per cent except in a few items, common man will have to pay more while travelling by air or hiring a law firm.
Mukherjee proposed to increase excise duty on all non-petroleum products, excepting a few, to 12 per cent from the existing 10 per cent.
On the other hand, items like imported LCD and LED TV panels of about 20 inches will have lesser increase in price due to excise duty hike. Customs duty on these items has been removed. Similar is the case with LEDs used for making lamps.
Prices of life saving drugs, probiotics and iodine have been cushioned from a steep rise as import duties on these items have been reduced.
Branded garments will escape the impact of increase in excise duty as abatement has been provided.
Gold and platinum will also become more expensive as the customs duty in imported standard bar has been hiked to 4 per cent from 2 per cent. The duty on non-standard gold bar has been hiked to 10 per cent from 5 per cent earlier.
Mobile phone parts will become cheaper as excise duty has been cut to 2 per cent from the existing 10 per cent.
In the budget, Mukherjee proposed increasing the customs duty on import of completely built cars and Sport Utility Vehicles to 75 per cent from 60 per cent (3,000cc engine capacity for petrol and 2,500 cc for diesel vehicles).
Moreover, excise duties for petrol cars with engines under 1,200 cc and diesel cars with engine capacity under 1,500 cc but the length exceeding four metres have been increased to 24 per cent from 22 per cent and a fixed duty of Rs 15,000.
Petrol and diesel driven vehicles having length exceeding four metres and engine capacity of over 1,200 cc and 1,500 cc respectively will now be charged with an ad valorem duty of 27 per cent instead of the earlier 22 per cent and a fixed duty of Rs 15,000.
Imported bicycles will also become more expensive as customs duty has been hiked to 30 per cent from 10 per cent, while the same for bicycle parts has been increased to 20 per cent from 10 per cent.
"Cost of most of the services and goods will increase for the common man with the increase in service tax and excise duties," Ernst & Young Tax Partner Saloni Roy said.
The Finance Minister has taken these steps given the tough fiscal position, Roy said.
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