Cash from ATM won't invite tax

New Delhi: The Union Budget may look all nice and friendly, but the devil lies in its details.

It will start pinching you as soon as you go through the details.

People using Automated Teller Machines, credit cards, debit or charge cards will now have to shell out extra with Finance Minister bringing these services under tax net.

However, withdrawing cash from ATMs won't invite service tax, say bankers. The use of ATM for any other services like payment of bills, LIC premium, mobile recharges etc will invite 12 per cent services tax, they explained.

Go ahead with buying that car or an outing for ice cream and pasta and pay less, but if you use your credit or debit card, it will cost more. Or that is exactly what the Budget proposals announced on Tuesday suggest.

And your smoke will be also be dearer.

Aiming to please the common man, Finance Minister P Chidambaram announced a slew of proposals that triggered a race among car majors - Maruti, Hyundai and Tata - to reach their customers first with a reduced price of up to Rs 23,000.

An analysis of the Budget proposal makes it clear that soft drinks to ice creams for the generation next, LPG stoves for housewives and footwear and flouroscent lamps for commoners and DVD drives, flash drives, printing and writing papers for professionals, will cost less as excise duties on most of these products have been brought down.

But cigrettes continue to be a luxury and Finance Minister did not miss a chance to make it dearer for smokers.

However, people aspiring to procure a computer will have to pay more with Budget proposing excise duty on both computer and packaged software.

Housewives may be in for some dissappointment with houshold articles including glassware, tableware, kitchenware, soaps, biscuits, all expected to become costlier.

Likewise goggles, umbrellas, henna powder, ceramic bricks and tiles, marble slabs, roofing tiles will become costlier with Finance Minister increasing excise duty or bringing them under the excise net.

Share transfers, public relations services, internet telephony as also international air travel except economy class and travel by cruise ships are also set to become costlier with these services coming under tax net.

Reflecting the human face of the UPA Government, Chidambaram has proposed to bring down customs duty on 10 anti-HIV and 14 anti-cancer drugs to make them affordable even as the peak rate has been brought down from 15 to 12.5 per cent.

With reduction in customs duty, plastics including PVC, alloy steel, aluminium, tin are expected to become cheaper for consuming industries.

In a move aimed at addressing the concerns of the industry, import duty on honey and vanaspati are proposed to be raised. The increase in duty, however, may impact the prices of the imported commodity in the local markets.