Budget 2014: Tax hike on cigarettes, soft drinks for better health, says Jaitley

Chennai: Union Finance Minister Arun Jaitley Thursday proposed hiking steeply the excise duty on cigarettes, pan masala, tobacco products and aerated drinks while reducing the rates on sports equipment like gloves and specified food processing and packaging machinery.

"These are healthy measures and I hope everyone would welcome them from the point of view of human and fiscal health," Jaitley said, presenting his maiden budget in parliament.

 Budget 2014: Tax hike on cigarettes, soft drinks for better health, says Jaitley

Arun Jaitley in Parliament. PTI

Jaitley proposed to increase the specific excise duty on cigarettes in the range of 11 to 72 percent.

Similar increases are proposed on cigars, cheroots and cigarillos.

"Likewise, the excise duty is being increased from 12 percent to 16 percent on pan masala, from 50 percent to 55 percent on unmanufactured tobacco and from 60 percent to 70 percent on gutka and chewing tobacco," he said.

"I also propose to levy an additional duty of excise at 5 percent on aerated waters containing added sugar."

In order to have a healthier environment, Jaitley proposed to expand the scope of usage of funds collected under the Clean Energy Cess to include financing and promoting clean environment initiatives and fundng research in the area of clean environment.

"To finance these additional initiatives, I propose to increase the Clean Energy Cess from Rs.50 per tonne to Rs.100 per tonne.

The Clean Energy Cess is presently levied on coal, peat and lignite for the purposes of financing and promoting clean energy initiatives and funding research in the area of clean energy.

He said minimization of harvest and post harvest losses of agricultural produce is an important measure for tackling food inflation and ensuring food security.

"To incentivise expansion of processing capacity, I propose to reduce the excise duty on specified food processing and packaging machinery from 10 percent to 6 percent," Jaitley said.


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Updated Date: Jul 10, 2014 15:08:49 IST