IMPACT OF BUDGET 2013-2014

BY

S.DOUGLAS ASIRVATHAM.

TOBACCO PRODUCTS.

1. Smoking is going to be costlier by more than 15%, with the budget increasing taxes on regular-sized cigarettes and cigars by 18%.

2. As per industry estimates, while cigarettes contribute nearly 75% of the tax revenues generated by the tobacco sector, it accounts for less than 15% of tobacco consumption in the country.

SUV’S,MOBILE PHONE AND SET TOP BOX.1. Excise duty on SUVs would be increased from 27 to 30

percent, but added that excise duty would not apply to SUVs registered as taxies.

2.  Duty on mobile phones priced above Rs. 2000, he said, has been raised to six percent from the current one percent.

3. Custom duty on Set Top Boxes increased from 5 to 10 percent.

GOLD IMPORT DUTY AND TAXES SPARED.1.To the surprise of many finance minister in his budget spares the 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 to 6 percent for gold in the month of january.

TAXING THE SUPER RICH.

1. Giving small relief to income tax payers, Finance Minister announced a credit of Rs 2,000 for persons with income up to Rs 5 lakh.

2. In order to generate more tax revenue, the Union Budget has decided to increase the tax liability of the rich by levying a surcharge of 10% on taxable income that exceeds Rs.1 crore. This one-time surcharge, which is applicable only for the assessment year 2014-2015, will be in addition to the education cess of 3% that is paid on total income-tax.

3. An additional surcharge of 10% is likely to impact only about 42,800 taxpayers, who are currently earning an annual income above Rs.1 crore.

UNCHANGED TAX SLAP VEXES MANY.

Income Range

General (non-senior citizens) Category

Women (Below 60 years of age)

(This category is abolished from this year and is thus is

same as that of  General Category

Senior Citizens (Men and Women above 60 years of age), but below 80

years

Very Senior Citizens (Men and Women

above 80 years of age)

Upto Rs. 2,00,000 Nil Nil Nil Nil

Rs. 2,00,001 to Rs. 2,50,000 10% 10% Nil Nil

Rs. 2,50,001 to Rs. 5,00,000 10% 10% 10% Nil

Rs. 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 look into, the following emerges as the most important ones:

1. a)      Declaring Jet fuel as a notified commodity so that the taxes are considerably 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 subject to Sales Tax and Sales tax is a State subject under the Indian Constitution.

2. b)      Doing away with Service tax in tour and trade. Tours and Tourism attracts service tax of 12.5 per cent. And the Industry was of the 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 in Tax.

AVIATION INDUSTRY.

The budget has not addressed any of the above except for a minor correction in the duty- free period for import of spares and test equipment for MRO. The budget has increased the time period for consumption or installation of parts and testing equipments imported for maintenance, repair and MRO of aircrafts by units engaged in such activities form the existing three months to a year. 

AGRICULTURE SECTOR.

1. For a fast track growth of agriculture, which showed 1.8% growth this year despite bad monsoon, the total plan outlay for agriculture has been increased by 22 per cent from Rs Rs 20,208 crore to 27,049 crore. This will support the new initiatives announced in the budget besides backing the existing programmes which have resulted into record food grain production this year.

2. "Agriculture contribute 14.1% in the total GDP but still more than 58% of the population rely on farm for livelihood. This booster will help agriculture grow and attain the targeted growth rate of 4%.

MANUFACTURING SECTOR.

1. To spur local electronics manufacturing, Finance Minister P Chidambaram offered sops to chip makers to set up base in India. The industry, though, considered the act a good start but far from sufficient.

2. .While presenting the Union Budget for 2013-14, Chidambaram said the Indian government will waive customs duty for plants and machinery in the semiconductor sector. 

3. While India is home to semi-conductor designing, very little manufacturing is done in the country. The Indian semiconductor design market is expected to grow to $14.5 billion (Rs 78,200 crore) in 2015

SCIENCE AND TECHNOLOGY.

1. The government announced setting up of a Rs 2,000-crore fund to help encourage and finance such products. Presenting the General Budget in Lok Sabha, Finance Minister said that Ministry of Science and Technology, Ministry of Finance and Principal Scientific Advisor to the Government have identified a few amazing science and technology innovations. 

He said the government has decided to fund organisations that will scale-up and make these products available to the people.

IT MODERNISATION.

1.Government has allocated Rs 532 crore for IT Modernisation project of Post offices. 

2."Post offices will become part of the core banking solution and offer real time banking services. I propose to provide Rs 532 crore for the project in 2013-14," Finance Minister P Chidambaram said while presenting the Budget proposals for the next fiscal in Parliament.

THANK YOU !!!!!