Budget 2013: What gets costlier, what gets cheaper on P. Chidambaram's orders

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Drive in luxury car, speaking on swanky cell phone, eating out and yes, smoking too to cost more. (Reuters) Drive in luxury car, speaking on swanky cell phone, eating out and yes, smoking too to cost more. (Reuters)
SummaryDrive in luxury car, speaking on swanky cell phone, eating out and yes, smoking too to cost more.

Sports utility vehicles (SUVs), imported cars and motorcycles, high-end mobile phones, eating out at air-conditioned restaurants and cigarettes will become costlier with Finance Minister P Chidambaram deciding to impose higher taxes on these items.

On the other hand, there is good news for ladies as far as jewellery is concerned as they will be allowed to bring more duty free gold items provided they have stayed out of India for more than year.

Moreover, branded apparels will become cheaper as there will be zero excise duty on the item. Carpets and other textile floor coverings of coir or jute will also become less expensive as they have been fully exempted from excise duty.

In his Budget proposals for 2013-14, Finance Minister P Chidambaram said excise duty on Sports Utility Vehicles (SUV) will be raised to 30 per cent from 27 per cent.

"SUVs occupy greater road and parking space and ought to bear a higher tax... However, the increase will not apply to SUVs registered as taxis," Chidambaram said.

Targeting the "affluent class in India that consumes imported luxury goods such as high end motor vehicles, motorcycles, yachts and similar vessels", he said: "I am sure they will not mind paying a little more."

Subsequently, basic customs duty on new passenger cars and other motor vehicles (high-end cars) costing more than USD 40,000 and/or engine capacity exceeding 3,000cc for petrol run vehicles and exceeding 2500 cc for diesel run vehicles has been hiked 100 per cent from 75 per cent earlier.

Likewise, duty on yachts and similar vessels has also been raised to 25 per cent from 10 per cent.

In a blow to mobile handset makers, excise duty on instruments priced above Rs 2,000 has been raised to six per cent but the concessional excise duty of one per cent and has been kept unchanged in the case of low priced phones.

Smokers will also have to shell out more for their puffs with Chidambaram training his eyes on them for more tax revenues.

"What does a Finance Minister turn to when he requires resources? The answer is cigarettes. I propose to increase the specific excise duty on cigarettes by about 18 per cent. Similar increases are proposed on cigars, cheroots and cigarillos," he said while delivering the Budget speech.

Eating out at air conditioned restaurants will also become more expensive with the Finance Minister bringing it under the purview of service tax. At present, service tax of 12

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