For flyers going abroad, the Union Budget offers a mixed bag. While it restricts the number of duty-free cigarette packets that can be brought into the country, it allows them to bring more goods without paying duty.

Radio-taxis

It also makes using radio-taxis to and from airports costlier.

For service tax purposes, the Budget has brought radio-taxi service on a par with rent-a-cab service. This means, the passenger will have to pay service tax on the radio-taxi fare. But, thanks to an abatement provision, the service tax payable will be less than 12 per cent, Finance Ministry officials have clarified.

Abatement means service tax will be levied only on the fixed proportion of the fare. This will be applicable on every radio-taxi, whether used for going to airport or anywhere in the city.

For radio-taxis, the rate of abetment will be 60 per cent, which means service tax will be levied only on 40 per cent of the total fare. This translates into an effective service tax rate of 4.8 per cent, which is similar to what one pays in an AC restaurant. Now, after adding education cess at 3 per cent of the tax, the total service tax outgo will be 4.94 per cent of the fare. The tax is going to be effective form October 1.

Baggage rules

The Budget has also amended the baggage rules, which prescribe how much of goods a passenger coming from abroad can bring without paying duty. Usually, passengers bring, among other things, electronic goods (excluding LCD, LED and plasma TV), chocolates, perfumes, cosmetics and toys within the allowed limits.

The amended provision, which came into effect from July 11, has halved the quantity of cigarettes, cigars and tobacco that can be brought duty-free. For cigarettes, the quantity has been reduced to 100 from 200; cigars, to 25 from 50; and tobacco, to 125 gm from 250 gm. Also, a passenger will be allowed to bring one of these three items.

There is no change as regards duty-free alcohol, which stands at two litres per passenger. The amount allowed in buying these items will be over and above the free-baggage allowance, which has been raised to ₹45,000 from ₹35,000.

If the passenger is less than the 10 years of age, the amount has been raised to ₹17,500 from ₹15,000.

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