Published Editorial

Times guide to indirect taxes

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Times of India

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Proposal: Any service provided by cord blood banks for preservation of stem cells is exempted from service tax. 

Impact: A stem cell preservation package costing Rs 80,000 is likely to cost Rs 71,200 only. 

P: Excise duty on select goods such as washing machines, laptops, air conditioners, cameras, microwaves, TVs etc covered under chapter 84 and 85 of Central Excise Tariff shall now have a reduced rate of duty from 12.36% to 10.3%.

I: Some of the popular goods which may undergo price reduction (in approximate terms) are: Voltas 1.5 tons split AC from Rs 32,700 to Rs. 31,900; Electrolux 240 litres frost free refrigerator from Rs 18,000 to Rs. 17,400; Whirlpool 8 kg top-load fully automatic washing machine from Rs 30,100 to 29,400; Lenovo Ideapad Z 510 laptop from Rs. 59,800 to Rs. 58,100; Samsung's 28 litres microwave from Rs 14,600 to Rs 14,100; Nikon DSLR D5100 camera from Rs 32,000 to Rs 31,100; and Samsung 40 inch 3D LED TV from Rs 57,500 to Rs 56,150. 

 

P: An option has been given to all mobile handset manufacturers to pay 6% with Central Value Added Tax (CENVAT) credit or 1% without CENVAT credit. CENVAT credit rules provide for a tax credit to manufacturers and service providers. 

I: Earlier handsets retailing for more than Rs 2,000 did not have option to pay excise duty of 1%. This option is now available and hence, manufacturers may choose cost-effective credit methods and may pass on the benefit to customers. 

P: Excise duty rate for motorcycles, scooters cut from 12.36% to 8.24% 

I: Honda CB Unicorn 150cc with on-road price in Mumbai of Rs 76,649 is likely to be cheaper by approximately Rs 2,700 and may now cost Rs 73,949. Honda Activa scooter with on-road price in Mumbai of Rs 56,888 may now cost only Rs 54,900. 

P: Excise duty rate on motor vehicles running on petrol, LPG or CNG having engine capacity up to 1200cc and less than 4 metres is reduced from 12.36% to 8.24%. 

I: A Maruti Suzuki WagonR (LPG) with on-road price in Mumbai of Rs 5.23 lakh may now cost less by approximately Rs 19,000. 

P: Excise duty rate on diesel motor vehicles having engine capacity of up to 1500cc and length not exceeding 4 metres is reduced from 12.36% to 8.24% 

I: A Maruti Suzuki Swift VDi diesel car with on-road price in Mumbai of Rs 7.51 lakh may now be available at a better price of Rs 7.24 lakh. 

P: Excise duty rate on a nondiesel motor vehicles having engine capacity of more than 1200cc but up to 1500cc and length less than 4 meters shall be reduced from 24.72% to 20.6%. 

I: A Hyundai i20 Sports Automatic petrol car with 1400 cc engine with a Mumbai on-road price of Rs 9.4 lakh may now cost less by approximately Rs 30,000. 

P: Excise duty rate on motor vehicles (Sports Utility Vehicles) having engine capacity of more than 1500cc and ground clearance of more than 170mm shall be reduced from 30.9% to 24.72.% 

I: The popular SUV Toyota Fortuner with on-road price in Mumbai of Rs 27.91 lakh may be cheaper by approximately Rs 1.25 lakh. 

P: Excise duty rate on motor vehicles (non-SUV) having engine capacity of more than 1500cc and length exceeding 4 meters shall be reduced from 27.81% to 24.72%. 

I: Mercedes's flagship car the new S class (SLK 350) (Rs 1.06 cr on-road Mumbai) could be cheaper by Rs 2.4 lakh. 

P: Excise duty rate on hybrid motor vehicles (option to run on electric energy) shall be reduced from 12.36% to 8.24% 

I: The environment friendly Mahindra Reva costing Rs 7.63 lakh (on-road Delhi) may now be pocket friendly by approximately Rs 27,000. 

Methodology: We have taken the MRP of popular brands in this table, factored in a tentative distributor's margin and then computed the indicative impact of budget announcements.

(Note: The above reduction in rates come into immediate effect and applies up to June 30, 2014. The full-fledged budget could revise these rates.)