Liquor, Cigarettes May Be Taxed More in Budget: Avinnash Gorakssakar

Finance Minister Arun Jaitley could increase taxes on liquor, cigarettes and luxury cars in his maiden budget on July 10, Avinnash Gorakssakar, founder director, moneyinvestments.in said.

In the last full-year budget, former Finance Minister P Chidambaram had increased specific excise duty on cigarettes by 18 per cent. He had also increased the import duty on high-end motor vehicles from 75 per cent to 100 per cent; and on motorcylces from 60 per cent to 75 per cent.

"You could be seeing liquor, you could see cigarettes, you could see probably see luxury cars being taxed. So definitely the government would make an effort to recover revenues also. These could be sectors where possibly it (taxes) could be hiked," Mr Gorakssakar told NDTV.

Recently, Union Health Minister Harsh Vardhan asked for a substantial hike in excise duty on cigarettes and other tobacco products in the budget.

Dr Harsh Vardhan has said cigarettes should carry uniform tax of Rs 3.5 per stick irrespective of size. Currently, duties are imposed on the basis of length of cigarette sticks.

India's largest cigarette-maker ITC's shares fell as much as 7 per cent on Monday, following the news. ITC's average excise duty is around Rs 1.8 per stick currently, according to brokerage CLSA.

Sectors like textiles, housing, pharmaceutical are likely to get incentives in the budget, Mr Gorakssakar said.

"In the BJP manifesto it was clearly mentioned that sectors which affect employment and which actually affect the masses, I think these are sectors that would probably get some incentives in terms of infrastructure, investment or maybe in terms of some duty cuts," he said.