Finance Minister Arun Jaitley’s Budget 2016 has decided that buying a car will now be costlier, as the government has announced a 1% additional tax on cars costing above Rs 10 lakh. Small cars will incur 1% infra cess, and 2.5% infra cess will be imposed on diesel cars. A 4% additional levy will be imposed on high-capacity passenger vehicles and SUVs.
Not just tobacco products (save the bidis), even jewellery becomes costlier. The Budget proposes 1% excise duty levy on articles of jewellery. This levy, however, is not applicable to silver jewellery other than those studded with diamonds or some other precious stones. Prices of bottled drinks and soft drinks are to increase with immediate effect by a rupee or two as excise duty imposition increases from the current 18% to 21%. Service tax hikes mean eating out will not be fun anymore and an excise duty hike on readymade/branded garments means you’ll probably shop less.
Air passenger traffic has been increasing at the rate of 20% in India, but the new move may curb that. Shares of all three listed airlines (Jet Airways - India Ltd, InterGlobe Aviation Ltd (IndiGo) and SpiceJet Ltd) fell after the announcement. The increased cess on coal may increase coal-fired power generation by 15 paise per unit.
The Finance Minister has announced the launch of a National Dialysis Programme to address the high costs involved in renal dialysis processes. Similarly, solar power generation equipment, routers, modems, and set-top boxes will get cheaper and so will hybrid electric vehicles as a result of taxation policies. Housing for the poor will cost less.
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