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Pin-prick : No more Balloon tax!
« on: February 28, 2010, 06:15:58 AM »

Death of a duty that lived an unknown life
- Yes, there was an 8% balloon tax
OUR BUREAU

Balloons on sale at Millennium Park on Saturday. (Bishwarup Dutta)

Calcutta, Feb. 27: Entrusted with the noble mission of making mothers smile, the lovable balloon has just burst one of the most well-kept secrets of the nation.

Believe it or not, “toy” balloons did draw an 8 per cent excise duty until Pranab Mukherjee tried his hand at humour yesterday by saying they “are a source of joy to millions of children. To bring a smile to their mothers’ faces, I propose to fully exempt them from any excise duty”.

The professorial idea of satire did not exactly bring the House down. Almost 24 hours later, the balloon benevolence too looked as if it was about to fall flat.

The sharpest pinprick: nobody seems to be aware that a balloon tax did exist in this country, let alone that it was 8 per cent. If few feel the pain, how can you please them by alleviating it?

Pop!

Another jab: The citizenry are probably enlightened about the tax now, but many vendors — the sultans of sales-savvy who know how to catch a toddler’s eye and loosen the parents’ purse — have pleaded their inability to “pass on the benefit” to the “consumer”.

Pop!

Now the unkindest poke: At least one mother has chided Mukherjee — and presumably this newspaper, too — for wasting “precious time” playing with balloons.

Pop!

“I wonder why Mr Mukherjee had to waste precious time during his budget speech to mention something as insignificant as toy balloons. He should have concentrated on trying to check inflation to bring a smile to our faces,” said homemaker Vineeta Dubey, 38, who frequently buys balloons for her 10-year-old daughter Radhika.

But make no mistake, Mrs Dubey. What Mukherjee did was no child’s play.

Putting the promise to practice involves a long-winded – and yawn-inducing process – only adults can enjoy.

Mukherjee cracked the joke and let go off the string, without shedding much light on the great unknown tax.

It was up to the bureaucrat who painstakingly drafted the excise “Explanatory Notes” in the budget to ensure that the gem was not lost in the eddies of tax breaks and blows.

So there it was – the balloon bonanza fluttering in Page 5 of the “Explanatory Notes (Excise)” under Chapter 40. “Excise duty on Toy Rubber Balloons of Natural Rubber Latex falling under heading 40 is being reduced from 8% to Nil (S.No. 85A of the notification No. 4/2006-Central Excise as inserted vide Notification No.10/2010-Central Excise dated 27.02.2010 refers).”

Phew!

Translation: the 8 per cent excise duty has been lifted and the decision has been included in a notification. The proposal has come into effect from last night itself and does not need parliamentary approval.

If brave-hearts want to chase the paper trail further, this is what lies round the corner: the balloon announcement will grace the stellar position of 85A in the notification, sandwiched between Exhibit 85 (rice rubber rolls for paddy de-husking machine) and Exhibit 86 (raw, tanned or dressed fur skins).

But all the yeoman service seems to have gone waste.

Balloon-sellers said they didn’t even know there was a central excise duty on balloons made of natural rubber. “I didn’t know there was one. I don’t foresee any significant change in prices because of the waiver,” said a wholesaler.

Sharmistha Basu, 32, a mother of a four-year-old boy, agreed. “Frankly, till it was mentioned in the budget speech, I had no idea there was a central excise on balloons. I doubt if the waiver will make any difference to the price I pay for balloons,” the IT professional added.

In the wholesale market, the price of balloons varies from anything between Rs 9 a packet (each packet has 70 pieces) and Rs 30 a packet, depending on the size of the balloons. Which means even the biggest pieces come for less than 43 paise. The smaller ones cost less than 13 paise.

For individual vendors, like Shibu Mondal who sells heart-shaped balloons for Rs 5 a piece outside Millennium Park, the 8 per cent excise waiver could turn out to be, if nothing less, an occupational hazard.

Next time a young mother leans out of a car that has just started moving to buy a balloon to silence her badgering kid, Mondal has to find small change – a precious commodity – to adjust the waiver if he has to remain a law-abiding citizen.

“I make a profit of Rs 1.50 to Rs 2. If prices do come down, I will lower the price but only if I can retain the profit margin,” Howrah resident Mondal said.

Ganesh Raut, who sells balloons at Nicco Park, said the cost difference because of the waiver would be too little. “I cannot lower my prices and make a loss. Maybe, party organisers can afford to lower prices because of the larger scale.”

Party organisers begged to differ.

“We are expecting clients to tell us to cut down the cost of decoration, but they must understand that transportation costs will also go up because of the rise in fuel prices,” said Manju Karnani, a party organiser who runs Party Fun.

Although balloons account for around 30 per cent of the decor for children’s parties, Karnani said the hike in fuel prices would “neutralise the tax cut”.

So Mukherjee has himself to blame. He can, of course, say he had floated a trial balloon.
http://www.telegraphindia.com/1100228/jsp/frontpage/story_12161452.jsp
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