Toyota not to launch small car in a hurry
Bangalore: Toyota-Kirloskar Motor (TKM) said it will not hurry up the process of launching a small car in India due to the reduction in excise duty on small cars.

The company was disappointed with the Union Budget for not extending excise duty reduction to mid-sized and bigger cars. He said with the usage pattern in the auto sector undergoing a change because of better infrastructure in the country, there was no reason in excluding certain cars from excise duty cuts.
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Small cars to benefit most
New Delhi: With the excise duty cut from 24 per cent to 16 per cent on small cars having — 4000 mm length and 1500 cc diesel engine or 1200 cc petrol engines, Maruti Udyog and Hyundai Motor India announced immediate price cuts. The price cut in aluminium, copper and plastic has led carmakers like Honda SIEL and and General Motors to announce a cut in the prices of their popular City, Accord and Optra models.

The following models have seen large price cuts:

Honda City Exi and Gxi — Rs2000
City Zx VTEC — Rs10,000
Honda Accord — Rs15,000
GM Optra — up to Rs20,000
Hyundai Santro — Rs23,000
Maruti — up to Rs13,000-Rs 22,000

Big car makers are upset by the excise duty cut on small cars. Rajeev Chhaba, president and managing director, General Motors India said GMI does not see a level-playing field anymore in India. He added that GMI, with the help of SIAM (Society of Indian Automotive Manufacturers), will approach the finance minister for an excise cut on automobiles across the board.

Rajive Saharia, general manager-marketing, Honda Siel Cars India, said, "The rules of the game have changed in India. We have had uniform rate of taxes and it was the customer who decided on which car to buy going by his needs. Honda Siel depends on an upgradation process wherein people buy bigger cars from smaller cars. That step is going to be steeper now."

Other cars that can benefit from the reduction in excise duty include the Hyundai Getz, if it gets a 1,500cc three-cylinder CRDi engine and the upcoming Suzuki Swift with a 1.3 DDi common-rail engine.
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BSNL One India scheme from today
New Delhi: The Budget proposals for the telecom sector may have been lacklustre but the operators are going full steam ahead with their plans of announcing One India tariffs, which will allow subscribers to make STD calls at Re1 a minute.
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Telecom users, service providers see no cause for cheer
New Delhi: Telecom consumers and service providers have little to cheer from the Budget 2006-07 today.

While the telecom industry was expecting a reduction in the licence fee paid as a percentage of the annual revenue, the finance minister's proposal to increase the service tax by 2 per cent will result in higher telephone bills every month. Consumers will also have to pay service tax on internet telephony services, this was exempt till now. The decision will make an already ailing internet telephony business, increasingly unviable.

The finance minister has announced a support of Rs1,500 crore from the Universal Services Obligation for rolling out telecom network in rural areas which is actually lower than the Rs1,750 crore (Revised Estimates) disbursed in 2005-06. Though the amount for 2005-06 was higher than previous years' Budgetary Estimates of Rs1,200 crore, more than 60 per cent of the money collected towards USO Fund has not been ploughed back into the sector.
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Set-top boxes turn more expensive
While finance ministry has removed customs duty on set-top boxes, used for accessing cable-based broadband services he has imposed a 16 per cent excise duty and a 4 per cent special additional duty on the set-top box that will make locally manufactured set-top boxes dearer by 10 per cent.
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Desktops, notebooks may turn costlier
New Delhi: The 12 per cent excise duty on computers is likely to impact prices of computers and notebooks. Companies such as Zenith, Acer and HP have predicted about 5 per cent increase in prices of PCs and notebooks, while HCL and hardware association MAIT maintained that the prices would remain stable.

Despite the finance minister's statement that the 12 per cent excise duty would be eligible for full input tax credit and thereby not impact prices, companies like HP said the prices of desktops would increase by 3-5 per cent, while the notebook prices would rise by 5 per cent.

MAIT and HCL said there would be no adverse impact on PC prices, and the prices will remain unchanged. MAIT actually welcomed the Budget announcements saying that it has addressed the problem of inverted tariff structure. Nasscom president, Kiran Karnik, said the excise duties on computers and software had come at a time when the domestic market was set to take off in a big way.
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Software prices to rise
The imposition of excise duty of 8 per cent on packaged software would lead to an increase in prices of software sold by companies like Microsoft and Tally, among others.
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BPOs come under service tax net
The Budget has withdrawn the service tax exemptions for taxable services provided by a call centre or a medical transcription centre. "This means that the domestic work that the call centres do will be subject to service tax.
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Domestic airlines to benefit from one more year of tax exemption
New Delhi: The Union Budget 2006-07 has provided relief to the domestic aviation sector though international air travel and travel by cruise ships will become slightly more expensive.

The decision to extend the exemption on income tax on lease payments for an aircraft or aircraft engine by one year will benefit almost all the domestic airlines.

The Budget, however, has also proposed levying a 12 per cent cess on air travel in business or first class and travel on cruise ships.

The fringe benefit tax would be levied at 5 per cent instead of 20 per cent for airline companies and shipping industry to value the benefits in the form of hospitality and use of hotel and lodging facilities.

The government has also provided a Budgetary support of Rs325 crore to Indian Airlines. The funds are to be utilised by the airline to finance its Rs9,890-crore 43-Airbus fleet acquisition plan.
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