Cars, jewellery and cigerattes to cost more
29 Feb 2016
Finance minister Arun Jaitley has proposed to collect tax at source at the rate of 1 per cent on purchase of luxury cars exceeding value of Rs10 lakh and purchase of goods and services in cash exceeding Rs 2 lakh.
To tackle the pollution and traffic situation in the country, the finance minister proposed infrastructure cess of 1 per cent on small cars - petrol, LPG and CNG - 2.5 per cent on diesel cars of certain capacity and 4 per cent on other higher engine capacity vehicles and SUVs.
The 'Clean Energy Cess' levied on coal, lignite and peat was proposed to be renamed as 'Clean Environment Cess'. Its rate was increased from Rs200 per tonne to Rs400 per tonne.
To discourage consumption of tobacco and tobacco products, Jaitley proposed to increase the excise duties on various tobacco products other than beedi by about 10 to 15 per cent.
No credit of this cess will be available nor credit of any other tax or duty be utilised for paying the cess, he said.
Jaitley also proposed levy of excise duty of 1 per cent without input tax credit or 12.5 per cent with input tax credit on articles of jewellery (excluding silver jewellery, other than studded with diamonds and some other precious stones), with higher exemption and eligibility limits of Rs6 crore and Rs12 crore, respectively.
The finance minister further proposed to raise excise duty on ready-made garments with retail price of Rs1,000 or more to 2 per cent without input tax credit or 12.5 per cent with input tax credit.
He also proposed to increase clean environment cess on coal, lignite and peat from Rs200 per tonne to Rs400 per tonne.
Highlighting the government's priority towards a lower tax regime with non-litigious approach the finance minister desired to give an opportunity to the earlier non-compliant to move to the category of compliant.
He reiterated government's commitment to provide a stable and predictable taxation regime and reduce black money.
