Budget for most of us means – Income Tax! But there is something more than Income tax – Service Tax and Excise duty which impacts our household expenses and thus the money we can save. I am sure Service Tax is something that most of us would be aware of. If not just pull out your Telephone Bill and check out for word service tax.
Excise duty is not much talked about but just for starters it’s a tax that manufacturing units’ pays to government on every goods manufactured from toothbrush to cars. So if the excise duty increases by 2% manufactures would pass on the same to end users. This in turn would make things expensive for you!
The other change in service tax is that the net has been widened to include almost all services that comprise a huge chunk of the household consumption basket. Only 17 items, such as essential education, public transport and services meant for agriculture, are exempt from this tax. Also in case of Jewellary, the customs duty on Platinum has been hiked from 2% to 4% while excise duty for Gold has been increased from 1.5% to 3%.
Below is the estimated increase in expenses under various headers.
So it seems Finance Minister has given from one hand by altering income Tax slabs but has taken it back by increasing service tax, excise duty and custom duty.