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Rajesh Magow

first_imgThe Finance Minister announced that 160 non-functional airports will be developed at a cost of Rs 50-100 crore each. This is a welcome move as it will improve connectivity within the country especially in tier two and beyond towns and cities and thereby help boost the travel and tourism industry. The Budget also proposed to increase the excise duty on Aviation Turbine Fuel from 8% to 14%. The financial health of the aviation industry of the country was just beginning to stabilise but this move will have some adverse impact on the demand side for the industry. Lastly, service tax has now been increased to 15% from 14.5%. Krishi Kalyan Cess at 0.5% will be levied on all taxable services. While it is understandable that this move is aimed towards financing initiatives for improvement of agriculture and welfare of farmers, this will lead to paid services becoming dearer. Worth mentioning that service tax has been consistently increasing over the past few years, it stood at 12.36% in 2013-14. Not only service based companies but also the end consumer of the services will bear the brunt of this move.last_img

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