Excise duty up, cigarettes get expensive

Following the announcement, cigarette stocks took a severe beating with ITC’s shares tanking by 8.27 per cent on the Bombay Stock Exchange.

The government, meanwhile, increased excise duty to 12.50 per cent from 12 per cent, while exempting education cess, and secondary and higher education cess leviable on excisable goods. In pursuance of the government’s call for a Swachh Bharat, clean energy cess on coal has been doubled from Rs 100 per tonne to Rs 200 per tonne while duty on sacks and bags made of ethylene polymers has been hiked to 15 per cent.

In terms of benefits, the government has made it cheaper to buy leather footwear above Rs 1,000 per pair, reducing excise duty on them to 6 per cent from 12 per cent. Similarly, inputs for manufacture of LED drivers has also been halved to 6 per cent.

Apart from the steep hike in tobacco, excise duty of 2 per cent without Cenvat credit or 6 per cent with Cenvat credit has been levied on packaged condensed milk and peanut butter. Duty on mineral and aerated waters, iced tea, lemonade and other beverages has also been increased.

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Duty on chassis for ambulances has been reduced from 24 per cent to 12.5 per cent subject to actual user condition. Concessional duty of 6 per cent on specified goods for use in manufacture of electrically operated vehicles and hybrid vehicles was extended up to March 31, 2016.