Karnataka State Budget 2016
|The Hon’ble Chief Minister and Finance Minister of Government of Karnataka has presented the Budget for the year 2016-17 today. The highlights of Budget from VAT perspective are given below:
GOODS AND SERVICES TAX
- World Bank, in its report of 2015 on 'Assessment of State Implementation of Business Reforms' has ranked our State at number one with respect to "Registering and Complying with Tax.
- A module to train Tax Practioners has been developed and training is being conducted in the Fiscal Policy Institute.
Value Added Tax
- Scheme to recognize and honour five diligent tax payers in each of Bengaluru based divisions and three each from VAT divisions other than Bengaluru.
- Module for transportation of goods that will allow transporters to upload the details of goods being transported online for hassle-free movement of goods .
- Development of mobile application for the benefit of small dealers.
- Issue of online refunds to the eligible dealers.
- Online service of statutory proceedings using digital signature certificates.
- Allocation of Rs.10 crore to FKCCI for the construction of centenary building in memory of Sir. M.Visvesvaraya.
- Tax exemption on paddy, rice, wheat, pulses and products of rice, wheat and Ragi Rice (Processed Ragi)for one year.
- Tax exemption on Jowar Roti, Ragi Roti, Aluminium house hold utensils and Crude Oil.
- Tax exemption on handmade paper, hand-made paper boards, and handmade paper products manufactured and sold by a dealer recognized by the Karnataka Khadi and Village Industries Board.
- Tax reduction on Cotton from 5% to 2%.
- Tax reduction from 14.5% to 5.5% on Chatnipudi prepared from: Groundnut, Nigar seeds, Copra, Bengal gram, Garlic, Flax seeds and fried gram.
- Tax reduction from 14.5% to 5.5% on Office files made of paper and paper boards, Adult Diapers, certain articles of nickel and titanium, Hand operated Rubber sheet making machines, set top boxes for viewing Television content, Surgical; gowns, masks, caps and drapes of single use made of Non-woven fabrics, Multi-Media Speakers, Helmets and LED Bulbs.
- Additional Resources Mobilization Measures
- VAT increased from 14.5% to 20% on aerated and carbonated non-alcoholic beverages.
- Increase in rate of tax on petrol from 26% to 30% and diesel from 16.65% to 19%.
- Entertainment Tax increased from 6% to 10% on Multi System Operators (MSOs) and Direct to Home service providers (DTHs).
- Rationalisation measure
- Amendment to Sub-section 3 of section 10 of KVAT Act, 2003, to bring in clarity so as to have effect only from 1.4.2015.
- Amendment to Section 10 of the KVAT Act, 2003 to assess the dealers who are statutorily required to upload but fail to upload such purchase and sales statement by disallowing input tax.
- Provide for submission of Form VAT 240 electronically and to levy penalty for non-compliance under KVAT Act, 2003.
- Amendment to Section 38 to include cases relating to the dealers who file incorrect and incomplete returns.
- Amendment to Section 72 of the KVAT Act, 2003 to levy of penalty under the circumstances of filing revised returns resulting in tax liability of more than 5%.
- Amendment to entry 4 of VI schedule of the KVAT Act, 2003, to include only structural works contract of iron trusses, purlines and the like.
AGRICULTURAL INCOME-TAX Relief
- Abolition of Agricultural Income Tax with effect from 1st of April 2016.
CENTRAL SALES TAX Rationalization Measures
- Restriction of input tax claim charged in excess of two percent on purchase of cigarettes relating to interstate sale of cigarrates against 'C' form.
- Rescinding of notifications issued under the CST Act, 1956 reducing the rates to 1% which were issued before the introduction of VAT.
PROFESSIONS TAX Rationalization Measures
- Formation of Committee headed by an Additional Commissioner of Commercial Taxes to study and submit a report to simplify the Profession Tax Act.
- Amendment to section 5 to issue registration certificate within 3 days.
LUXURY TAX Relief
- Amendment to section 3-E to provide relief to class of facilities in hospitals.
- Amendment to section 7-A to empower authorities to re-assess escaped tax by including types of luxuries chargeable to tax which were not specified in that section.
ENTRY TAX Rationalization measures
- Reduction of mandatory payment of disputed tax and other amounts to 30% to get stay from First Appellate Authority and Karnataka Appellate Tribunal and to facilitate dealers to file appeal to the first appellate authority electronically.
- Revenue collection target of Rs.16,510 crores for the year 2016-17
Additional Resource Mobilization Measures
- Increase in Excise Duty on IML from the existing Rs.45 to Rs.50
- Increase in Excise Duty on Beer from the existing Rs.5 to Rs.10
- Increase in Additional Excise Duty on IML by 4% to 12% across all the 17 slabs w.e.f., 01.04.2016
- Increase in Additional Excise Duty on Beer from 135% to 150%
- Levy of Administrative fee of Rs.2 per litre on export and Re.1 per litre on import of Spirit (excluding Ethanol)
- Reduction in gap between the licence fees of different categories of liquor vending licences and increase the same by 25%
- To increase Wine production and keeping in view the upliftment of grape growers, provisions are made for allowing fortification of Wine by adding only grape spirit or pure fruit brandy
- Grant of Rs. 10 crore for widely publicizing the concept of "responsible drinking" in partnership with Liquor Manufacturing Associations
- Revision of 17 slabs of Declared Prices relating to IML with an increase of Rs. 35 each w.e.f., 01.07.2016.
STAMPS AND REGISTRATION DEPARTMENT
- Stamp duty is exempted from 10-02-2016 on sale deeds for purchase of property by persons out of the compensation amount paid by the Government for having acquired their property.
- Revenue of more than Rs.100/- crores is expected by revising/rationalising some Articles of the Karnataka Stamp Act 1957.
- Taxes enhanced on Stage carriages, city stage carriages, contract carriages, All India Tourist Buses, and Buses operating on Special permits.
- Taxes totally exempted on Electric transport and non-transport vehicles.