Heetesh Veera, Tax Partner, EY
The Union Budget 2014 by the Modi government has been one of the most awaited budgets. There are huge expectations from it, though factors like a slowing economy and high inflation have been constraints at the government's end.
From a consumer's perspective, ever increasing prices have been a matter of grave concern. While the budget has granted certain tax breaks on the personal tax front, from an indirect tax perspective, primarily giving impetus to the manufacturing sector has been the thrust, which will ultimately benefits the consumers through reduced prices and employment generation.
On an overall basis, to provide a fillip to capital goods, consumer durables and automobile sectors, excise duty rates and concessions have been extended till December 31, 2014. Consumers could also look at reduced prices of televisions on account of reduction in customs duty on certain products such LCD and LED TV panels (of below 19 inches) and colour picture tubes. Similarly, purchase price of personal and tablet computers could reduce on account of exemption from Special Additional Duty (SAD) on components used in their manufacture.
Reduction of excise duty on footwear, on specified food processing and packaging machinery, and on RO membrane element used in household water filters could also result in some savings. However, in order to encourage domestic production of goods, education cess and Secondary and Higher Education Cess (3 per cent) levied on all imported electronic products makes such products costlier.
In order to mobilise revenue, excise duty has been increased on cigarettes, gutkha and chewing tobacco, pan-masala and aerated products.
From a service tax perspective, local road transportation prices would increase as service tax levy extended on all radio taxis/ metered cabs. However, service tax exemption expanded to cover all life micro-insurance schemes where the sum assured does not exceed 50,000 per life insured.
Free baggage allowance increase from Rs 35,000 to Rs 45,000 is welcome, though higher limits could be prescribed.
On an overall basis, the budget could have a positive impact on consumer goods, though a broader impetus on fiscal and other measures would be required to address the current economic scenario.
—(Views expressed are personal)