New health and security cess unlikely to change consumer tax burden, says Deloitte - CNBC TV18

Contributing sentiments towards policy:

56% : On the broader fiscal picture, Mani pointed out that revenue from the new cess will go entirely to the Centre at a time when tax collection growth is behind target.
55% : For tobacco companies, the levy would apply even if production runs below full capacity.
54% : MS Mani, Partner-GST at Deloitte India, said the overall tax impact on consumers is expected to stay largely unchanged, but the purpose and structure of the levy are shifting.
54% : Also Read | Exclusive: Cigarette, pan masala tax overhaul: What is Health & National Security Cess and how it will work A major change in the cess design is that it will be based on production capacity rather than actual output.
53% : Any claim for lower tax would require approval from the authorities.
52% : He expects the cess to generate significant revenue to support healthcare costs linked to tobacco and national security spending.
48% : However, the revision does not simplify the already layered tax structure.
47% : "When something gets levied on the production capacity... the manufacturer has no option but to pay the tax... on the estimated production capacity," Mani explained.
46% : Mani said upcoming data will indicate whether improved demand, especially in high-tax categories like automobiles, can make up for the recent rate cuts.
45% : The change ends uncertainty over taxes on tobacco products after the end of the compensation cess regime.

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