UNION BUDGET 2017 – CIGARETTES, TOBACCO, MOBILES ASSEMBLED IN INDIA TO TURN DEARER

PARTS USED FOR MANUFACTURING OF LED LIGHTS WILL ATTRACT BASIC CUSTOMS DUTY 5 PER CENT AND CVD OF 6 PER CENT FROM NIL EARLIER

NEW DELHI (TIP): Smokers and tobacco consumers will have to pay more for their indulgence as Finance Minister Arun Jaitley continued with the crackdown on cigarettes, bidis and tobacco products by increasing taxes in the Budget 2017-18. Besides, mobile phones and LED lights assembled in India will also become dearer with the finance minister increasing duties on imported printed circuit boards and components respectively.

UNION BUDGET 2017: WHO SAID WHAT
PRIME MINISTER NARENDRA MODI: “This is a Budget for the future – for farmers, underprivileged, transparency, urban rejuvenation, rural development, enterprise. This Budget is yet again devoted to the well-being of the villages, farmers and the poor. From railway modernization to economic reforms, from education to health, from entrepreneurship to industry, the aim at fulfilling the dreams of all is clearly visible in the Budget.”

RAILWAY MINISTER SURESH PRABHU: “It’s a pro- growth Budget. The growth will happen because of huge investments that is happening. For example in railways, the provision for Rs 1.31 lakh cr for capital expenditure is unprecedented in railway history.”

UNION MINISTER VENKAIAH NAIDU: “It’s a fine exercise taken up by the Finance Minister. It’s very inspiring, bold steps has been announced. Particularly the political funding has been made transparent. People will be happy. Some political parties will become poor. That is why our opponents are saying the budget is anti-poor.”

UNION MINISTER KIRAN RIJIU: “It will transform rural India and urban as well in terms enhancing the capacity of building infrastructure. It is a great relief to the common masses and it will transform the economy of the nation. At the same time, the reform in taxation is great.”

BJP PRESIDENT AMIT SHAH: “The Union B8udget is aimed at all-round development with sops for the youth, women, farmers, the poor and middle class and that it will usher in a new era of progress.”

CONGRESS VICE-PRESIDENT RAHUL GANDHI: “We were expecting fireworks, instead it was a damp squib. It is just ‘sher-o-shayari’ in the Budget. There is nothing for farmers and youth and nothing for job creation. There is no clear vision, no idea.”

CONGRESS MP MALLIKARJUN KHARGE: “They have promised all these things (proposals to cleanse political system) keeping polls in five states in mind. They have not said anything for farmers, youth, women. They have accepted that GDP growth has gone down.”

WEST BENGAL CM MAMATA BANERJEE: “A controversial Budget which is clueless, useless, baseless, missionless and actionless. No roadmap for the country or the future from a government that has lost all its credibility.”

MADHYA PRADESH CHIEF MINISTER SHIVRAJ SINGH CHOUHAN: ” union budget is a revolutionary step for a progressive India. The budget will increase the pace of development and growth to help poor and marginalized people.”

CPM GENERAL SECRETARY SITARAM YECHURY: “It an example of Finance Minister joining the Prime Minister and the BJP President to create ‘jumlas’. The budget is a classic example of that. It won’t boost employment or generate demand. The idea of infrastructure development is a farce because the data given by the FM is not related to reality, does not match to what he said in his speech.”

MAHARASHTRA CM DEVENDRA FADNAVIS: “Pathbreaking budget! It has the same disruptive effect as demonetization had. Country will leapfrog to next level. This is indeed Budget for Better India. Positive effect of demonetization, the increase in capital expenditure by 25%will generate more jobs.”

HARSH KUMAR BHANWALA, CHAIRMAN NABARD: “The Budget focuses a lot on the rural and agriculture sector. Though the thrust on digital continues, reforms announced in the Budget will generate employment and help in doubling farmers income.”

Jaitley, however, made an attempt to make it more affordable for clean energy sources by cutting duties on solar tempered glass, fuel cell based power generating systems and wind operated energy generator. With the expected implementation of GST, large scale tinkering of tax structure has been avoided in the Budget thereby sparing most of the commonly used daily items from price changes.

“Implementation of GST is likely to bring more taxes to both central and state governments because of widening of tax net. I have preferred not to make many changes in current regime of Excise and Service Tax because the same are to be replaced by GST soon,” Jaitley said while presenting the Budget.

Yet, tobacco and cigarettes have not been spared.

Excise duty on unmanufactured tobacco has been almost doubled to 8.3 per cent from 4.2 per cent earlier, while that on pan masala has been hiked to 9 per cent from 6 per cent.

Likewise, excise duty on cigar, cheroots has been changed to 12.5 per cent or Rs 4,006 per thousand, whichever is higher from 12.5 per cent or Rs 3,755 per thousand, whichever is higher. Excise duty on chewing tobacco, including filter khaini and jarda scented tobacco has also been doubled to 12 per cent from 6 per cent earlier.

Excise on paper-rolled handmade bidis has been increased to Rs 28 per thousand from from Rs 21 per thousand and the same for paper rolled biris has gone up from Rs 21 per thousand to Rs 78 per thousand.

Populated Printed Circuit Boards (PCBs) for use in the manufacturing of mobile phones, subject to actual user condition will also attract SAD of 2 per cent from nil earlier.

Similarly, parts used for manufacturing of LED lights will attract basic customs duty 5 per cent and CVD of 6 per cent from nil earlier.

As per the Budget announcement, imported cashew nut (roasted, salted or roasted and salted) will also become dearer as basic customs duty on the item has been hiked to 45 per cent from 30 per cent earlier.

Imported silver medallion, silver coins, having silver content not below 99.9 per cent, semi-manufactured form of silver and articles of silver will also be dearer as there items will now attract CVD of 12.5 per cent from nil earlier.

Jaitley has made a few announcements in the Budget that will help consumers.

Railway travel with e-tickets booked through IRCTC will become cheaper as service charge on it has been withdrawn. RO water purifiers are likely to be slightly cheaper with basic customs duty on imported membrane sheet and tricot/spacer for use in the manufacture of RO membrane element for household filters has been reduced from 12.5 per cent to 6 per cent.

However, with a view to encourage domestic production of RO membrane element, the government has hiked basic customs duty on it to 10 per cent from 7.5 per cent earlier.

Customs duty of LNG has been halved to 2.5 per cent which can lead to lower power and fertiliser costs.

With an eye on promoting clean energy source, the government has reduced basic customs duty on solar tempered glass used in solar panels from 5 per cent to nil.

Likewise, the basic customs duty and CVD on all items of machinery required for fuel cell based power generating systems to be set up in the country lowered to 5 and 6 per cent from 10/7 and 12.5 per cent earlier.

Also, the basic customs duty, on resins and catalyst for manufacture of cast components for wind operated energy generator has been lowered to 5 per cent from 7.5 per cent earlier, while CVD and SAD on these items have been slashed to nil from 12.5 per cent and 4 per cent, respectively earlier.

Continuing the focus on promoting leather industry, Jaitley announced that basic customs duty on vegetable tanning extracts used in making leather products such as bags and shoes has been slashed to 2.5 per cent from 7.5 per cent earlier.

Miniaturised POS card reader for m-POS, micro ATM as per standard version, finger print reader/scanner and iris scanner will also be cheaper as duty on these item have been reduced to nil.

For the defence forces, services provided or agreed to be provided by the Army, Naval and Air Force Group Insurance Funds by way of life insurance to their members under the Group Insurance Schemes of the Central Government is being exempted from service tax as against 14 per cent charged earlier.

 

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