Mixed reactions to tax hike on cigarettes, SUVs

Last Updated: Thu, Feb 28, 2013 11:35 hrs

The increase in the excise duty on cigarettes, cigars, sports utility vehicles (SUVs) and mobile phones announced in the union budget 2013-14 Thursday received mixed reactions from people.

Excise duty on cigarettes was raised to 18 percent, on SUVs from 27 to 30 percent and six percent on mobile phones with a price tag of more than Rs.2,000. However, SUVs registered as taxis were exempted from the duty.

"As the cigarettes get expensive, people will not only be forced to curb the number of cigarettes they smoke every day but it will also act as a deterrent for a potential smoker," said investment banker Mahesh Chauhan, 35.

Agreed home maker Sonia Rawat, 40: "There is no other way to discourage a smoker than to increase the price of cigarettes. If you ask me I would recommend a further hike."

However, advertising professional Shikha Singh disagreed.

"People will simply switch to cheaper brands of cigarettes which would be even more harmful. A price hike won't force a smoker to quit," she said.

Similar was the reactions when it came to SUVs. While some argued that the raise was biased, others justified it.

"An SUV is big in size so raise the duty, that's a frivolous logic. There are a number of sedans as well which require equal road space as an SUV," said Chand Khan, 45 a shop owner in central Delhi's Ghaffar Market who would be buying a new SUV soon.

But 36-year-old Anupam George was pleased with the increase, arguing that the city, already plagued by traffic jams and high pollution levels, could avoid SUVs.

"I ride a bike and during peak hours, the smoke is intolerable. Moreover, SUVs require more road space and run on diesel. Small hatchbacks with petrol or CNG (compressed natural gas) engines should be encouraged," he said.

As far as smart phones are concerned, many said that the bracket should have been set at around Rs.6,000-Rs.8,000.

"There are no good phones below (Rs.) 2,000. Phones under (Rs.) 8,000 should have been exempted from the raise," said 20-year-old Delhi University student Ashish Manocha.

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