Budget 2012: Mobile bills to go up with increased service tax

The Union Budget 2012 is currently being termed as a non-event but consumers should get ready to pay more for their monthly mobile bills. The Finance Minister’s proposal to increase service tax from 10 percent to 12 percent will affect almost everything – from mobile phone bills to eating out to shopping to traveling. Currently, cellphone bills have 10 percent service tax and three percent education cess on the service tax.

Apart from the increased service tax, the good thing for the industry as a whole is the exemption of basic customs duty on cellphone parts. This could, in effect, help handset brands that are involved in local manufacturing (assembling) of cellphones. LED and LCD panels have also been exempted from custom duty, which should make them cheaper. Overall, get ready to pay more for eating out, shopping, buying cars and of course, an increase in “sin tax” on cigarettes.