The Budget proposals presented by Union Finance Minister Nirmala Sitharaman on Sunday draw a clear line between items that may turn cheaper for consumers and sectors that could feel the heat.
While the government has proposed to make sports equipment, leather goods, cancer medicines and seafood cheaper through policy support, duty-free imports and customs exemptions, trading activity and some corporate cash-distribution routes may become dearer after the proposed changes to buyback taxation, the securities transaction tax (STT) and tax collected at source (TCS).
What may get cheaper
Sports equipment: Sitharaman proposed the launch of “Khelo India Mission”, which would focus on employment, skilling and job opportunities in the sports. With this, sports equipment are expected to get better and more cost-effective.
Leather goods: The Finance Minister announced duty-free imports of specific inputs currently available for exports of leather. “I also propose to allow duty-free imports of specified inputs which are currently available for exports of leather or synthetic footwear to exports of shoe uppers as well,” she said.
Cancer medicines: Sitharaman announced customs duty exemption on 17 cancer medicines and added seven rare diseases for relief for patients by exempting import duties on personal import of drugs, medicines and food for special medical purposes used in their treatment.
Sea food: The Centre announced duty-free fish catch beyond territorial waters to support the fishermen community.
Microwave ovens: The government announced exemption from basic customs duty on specified parts used in the manufacture of microwave ovens.
Solar panels: In the energy sector, the government has extended the basic customs duty exemption on capital goods used to manufacture lithium-ion battery cells, and has also removed basic customs duty on the import of sodium antimonate used in making solar glass. Thus, solar panels may get cheaper.
EV batteries: The government announced that it would continue to waive import duty on machinery used to make lithium-ion battery cells meant for energy storage systems, helping reduce manufacturing costs and boost domestic battery production.
Personal use imports: In an effort to enhance ease of living, the Centre announced that the import duty on all dutiable goods brought in for personal use will be cut from 20 per cent to 10 per cent.
Travelling abroad: The tax collected at source on overseas tour packages has been cut to 2 per cent from the previous rates of 5 per cent and 20 per cent, with no minimum amount limit. This means means travellers will have to pay less money upfront when booking foreign trips.
What may become costlier
Trading: Trading and some corporate cash-distribution channels may get dearer as the government has proposed changes to buyback taxation, the securities transaction tax (STT), and tax collected at source (TCS) on selected goods, underscoring a thrust to limit tax arbitrage and tighten compliance.
Video games manufacturing: The government will withdraw the customs duty exemption on parts used to make video games starting April 1. As a result, video game consoles or locally assembled gaming devices may become slightly more expensive.
Misreporting taxes: The Budget proposes to extend immunity from penalty and prosecution to cases of misreporting as well, provided the taxpayer pays the full tax due along with interest and an additional amount equal to 100 per cent of the tax.
Coffee: The government has removed customs duty exemptions on coffee roasting, brewing and vending machines from February 2. This is likely to make imported coffee machines more expensive, increasing costs for cafés, offices and businesses that rely on such equipment.
Also read: A ₹53.47 lakh-crore Budget in numbers
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