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Industry wise Analysis

Jewellery:
Jewellery using imported diamonds will be 2% cheaper. Other imported jewellery will cost 2.5% less and jewellery made from synthetic stones will be lower by 5%. This is due to a reduction in import duty on cut and polished diamonds to 3%, a 2.5% cut in peak import duty on finished jewellery to 10%, a 7.5% cut in import duty on rough synthetic stones from 12.50% to 5% and a whopping 20% reduction in import duty on unworked corals from 30% to 10%.s

Sugar:
Sugar prices will not go up than the current rate of Rs.15 per Kg.

Apparels:
Customs duty on polyester fibres, and yarns and intermediaries like DMT And PTA will go down from 10% to 7.50%. This will translate into a slight lowering in the prices.

Telecom:
Instead of reducing the revenue share to 6% as asked for , the DoT has been asked to constitute a committee to study the present structure of levies and make recommendations.

Pharma:
The pharma industry wanted the period of granting the weighted deduction of 150% on R&D to be extended by 10 years. However, it was extended only till 2012 that is by 5 Years.

Oil :
The 4% additional countervailing duty on all crude and refined edible oils. The customs duty on imported sunflower oil has been slashed from 65% to 50% .

Tea:
Tea has been spared the VAT. The Special Purpose Tea Fund(SPTF) had said that this would improve the productivity by 30% to 50% in 5-7 Years. It set up for replantation and rejuvenation of tea gardens would eventually have a corpus of Rs.4761 Crore. The FMs mention about this in the Budget shows that it is on track.

Coffee:
The budget proposes a Rs.800 Crore fund to replant and rejuvenate 90,000 hectares of coffee plantation, 70,000 hectares of pepper (Rs.400 cr) and 50,00 hectares of rubber (Rs.500 cr) over a period of 5 to 7 years. The fund has a 15 year window to replant 2,00,0000 hectares, has a subsidy component of 25% , loan component of 50%, while rest is to be invested into the industry.

Cement:
As per the proposal a tonne of cement retailing above Rs.3,800 , or over Rs.190 for a 50-Kg bag, will attract an excise duty of Rs.600. Currently, it is at Rs.400 per tone .However, if a tonne of cement is sold below or at Rs.3800 the excise duty will come down to Rs.350 per tone from a flat rate of Rs.400 per tonne.

Real Estate:
The real estate has gone into a tizzy following the announcement of a service tax of 12.50% on commercial lease. This may further escalate the property prices.

Aviation:
Even though the Aviation Turbine Fuel (ATF) has become cheaper the airfares are not likely to go down. There seems to be an ambiguity regarding the levy of import duty. However, small operators like Bombardier CRJ are smiling since the ATF is now under the Declared Goods category with a CST levy of only 3% as against the earlier 26-30%. The Budget also proposes a 5-fold increase in the allocation for Air India , Airports Authority of India and Pawan Hans. The bad tidings came for the private aircraft owners. Their aircraft imports would now attract a duty of 3% along with countervailing duty and customs as against nil at present. The Civil aviation minister clarified that only those importing aircraft fuel for private use would be taxed.

Metal Industry:
The reduction of import duty on seconds and coking coal is aimed at reducing the cost of production for the steel industry, while the imposition of export duty on iron-ore and chrome-ore will help preserve depleting mineral resources. The customs duty on steel seconds and defectives have also been cut from 20% to 10%..

Cars:
The car czars were expecting an excise windfall. They got an additional cess and a small cut in customs duty. The car prices are likely to go up and the local brands will have a heavier impact on them.

Art:
The definition of capital asset has been widened to include works of art. This means now that every time you sell a work of art-be it an archaeological collection, drawing, painting or a sculpture -you have to pay Capital Gains Tax.


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