Recovery Time: RupeesReuters

The Union Budget 2013-14 presented by Finance Minister P. Chidambaram on Thursday evoked mixed reactions from the public. Some described it as a balanced one while the others, particularly from the high-income group, were disappointed with the additional tax on luxury goods.

The cost of Sports Untility Vehicles (SUVs) is likely to go up as the finance minister has increased excise duty on SUVs from 27 percent to 30 percent. Auto companies are likely to pass on the excise duty burden to consumers.

The rich have to spend more if they want to import luxury goods like motor vehicles, motorcycles, yachts, vessels etc, as the custom duty on such items were raised from 75 percent to 100 percent. The duty on motorcycles with engine capacity of 800cc or more went up from 60 percent to 75 percent, while duty on yachts and similar vessels were increased from 10 percent to 25 percent.

Prices of high-end mobile phones and smartphones are set to increase as the excise duty on handsets costing above ₹2000 has been hiked from 1 percent to 6 percent.

Marble prices are expected to go up with the government increasing excise duty from the present ₹30 per square metre to ₹60 per square metre. Hotel bills will also go up as service tax will be levied on all air-conditioned restaurants and not just restaurants that serve liquor, as in the past.

The rate of abatement for homes and flats with a carpet area of 2,000 square feet or more or of a value of ₹1 crore or more has been reduced from 75 percent to 70 percent, which means people building or buying such homes will have to pay more service tax.

New cable connections will cost more with the increase in duty on set top boxes from 5 percent to 10 percent. Prices of silk apparels may go up as the FM has proposed increased in duty on raw silk from 5 percent to 15 percent.

Smokers have to spend more as duty on cigarettes has been increased. Chidambaram proposed to increase the specific excise duty on cigarettes by about 18 percent. This applies to cigars, cheroots and cigarillos too.