Karnataka State Budget 2011

Commercial Taxes

Value Added Tax

• Additional resource mobilisation measures
  • Increase in the VAT rate on jewellery and articles of gold and other noble metals, precious and semi-precious stones from 1% to 2%.
  • Increase in the VAT rate on goods currently taxable at 13.5 % to 14 %.
• Reliefs and reform measures
  • Tax exemption on paddy, rice, wheat, pulses and products of rice and wheat continued for one more year from April, 2011
  • Tax exemption on coconuts (excluding copra).
  • Tax reduction on barbed wire from 13.5 % to 5 %
  • Tax exemption on de-oiled rice bran.
  • Reduction of tax to 5 % on school bags of prices upto Rs.500.
  • Reduction of tax on all kitchen utensils from 13.5 % to5 %
  • Reduction of tax on caps from 13.5 % to 5 %
  • Tax exemption on leasing of feature films and sale of copy rights relating to feature films
  • The benefit of refund of tax paid on purchases extended also to multilateral financial institutions like the Asian Development Bank
  • Increase in the period of validity of stay orders of the Appellate Joint Commissioners regarding disputed tax from 120 days to 240 days.
  • Reduction in the time limit for taking up assessment and re-assessment from 5 years to 4 years.
  • Increase in the turnover limit for compulsory audit of accounts of dealers from Rs. 60 lakh to Rs. 1 Crore.
  • Abolition of the provision requiring contractors to file copies of individual contracts.
  • Increase in the penalty for clandestine transport of goods taxable at low rates
  • Increase in the rate of interest for delay in payment of tax from 15 % per annum to 18 % per annum.