What Pranab's words mean for businesses in city and you
What Pranab's words mean for businesses in city and youu00a0
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After Union Finance Minister Pranab Mukherjee presented the Budget yesterday, there was the usual debate on what it meant to the common man. MiD DAY went about town to see its impact on the sectors you are most concerned with. Here are the results.
Restaurants and hotels The service tax cover has been widened to include hotel accommodation above Rs 1,000 per day and AC restaurants serving liquor. This means that staying in a hotel or eating in a restaurant that serves liquor as well will cost you 10 per cent more.
C Behl, general manager, Sun-n-Sand said, "The hotel industry has always been at the receiving end. We have never received incentives for giving higher employment. Liquor was always expensive in the country and, therefore, foreign clients never had anything more than a pint of beer, while we rarely got domestic clients. It's going to be difficult with the introduction of service tax."
Ganesh Shetty, president, Pune Restaurant and Hoteliers Association, said, "It's so baseless that the service taxes will be increased for restaurants for putting up air-conditioning. You can not tell customers that they have to pay more because they are sitting inside and using the AC. It's like we are being punished for better services. We were already paying 25 per cent sales tax and 10 per cent service tax."
Rate Card
Meal for two in four-star hotel before Budget: Rs 2,000 plus taxes
Meal for two in four-star hotel after Budget: Rs 3,000 plus taxes
Meal for two at AC restaurant serving liquor before Budget: Rs 1,500
Meal for two at AC restaurant serving liquor after Budget: Rs 2,200u00a0
Hospitals
For the first time, the government has introduced service tax for air-conditioned private hospitals having more than 25 beds. Though the service tax imposed is 10 per cent as a 50 per cent reduction is already in place for hospitals, the effective bracket is 5 per cent service tax. Besides that, the excise duty on hospital equipment, among other things, has been increased from 4 per cent to 5 per cent.
Hospital administrators said the hike in taxes would result in hike in cost of healthcare to the tune of 8 per cent across private hospitals.
Bomi Bhote, CEO of Ruby Hall, termed the introduction of service tax an "unfortunate decision".
"The hospitals aren't the ones to get affected; the people will have to bear the brunt. The cost of services will go up, right from basic things like OPD charges to bed charges to nurse charges and even pathological tests. It is sad as already the prices are increasing and this is one more burden on people," said Bhote.
Dr Parag Sancheti, director of Sancheti hospital, said that the service tax coupled with an increase in excise duty was a double blow that the healthcare industry was not expecting.
"There is nothing exciting in the Budget and, in fact, it is a bit disappointing. The costs are only going to go up and it is not a good idea to single out private air-conditioned hospitals," said Sancheti.
Rate Card
Cost of joint replacement surgery before Budget: Rs 1 lakh approx
Cost of joint replacement surgery after Budget: Rs 1.1 lakh approx
Cost of angioplasty before Budget: Rs 65,000
Cost of angioplasty after Budget: Rs 72,000
Real estate
To promote the development of affordable housing, the Budget has expanded the coverage of interest subvention to a loan of Rs 15 lakh for a house costing not more than Rs 25 Lakh.
Real estate developers say that the Budget also promises to control steel and cement prices.
Satish Magar, president of CREDAI, Pune, said, "There isn't any demand for affordable housing in the city and, therefore, you hardly see any house in the bracket of Rs 25 lakh. The promise of controlling cement and steel prices does not look very feasible. Personally, I do not see home prices decreasing nor do housing loans look very promising. So basically, this Budget has nothing for our industry."
Rate Card
Not much change in prices, say industry experts
Retail market
The Budget has introduced a 10 per cent excise duty for branded apparel and labelled jewellery. Virendrasingh Thakur, operations head, Westside, said that branded clothes would now cost at least 10 per cent more and shoppers would have to bear the brunt.
"We were dealing with high cost of cotton, and with the inclusion of excise duty the prices are expected to increase even further," he said.
Rate Card
Cost of a branded cotton kurti before Budget: Rs 399
Cost of a branded cotton kurti after Budget: Rs 449
