The Hindu Business Line : Fresh concessions on Kerala Budget proposals

The State Finance Minister, Dr T.M. Thomas Isaac, announced fresh concessions on the Budget proposals relating to luxury tax, entry tax and value-added tax (VAT) in the State Assembly on Tuesday.

Accordingly, luxury tax on hotel rooms with daily rents below Rs150 stands withdrawn. Rooms with rents ranging from Rs150 to Rs 499 will carry luxury tax at 10 per cent and those with from Rs 500 and above, 15 per cent.

LEVY ON CABLE TV

Luxury tax on cable TV will be Rs 5 per connection, instead of the proposed 5 per cent of the amount charged on the customers by operators.

Hotels will not have the facility to compound their tax returns.

Dr Isaac slashed the compounding fee for houseboats by 50 per cent from the rates proposed in the Budget. The new annual compounding rates are:

Rs 10,000 for one-bedroom houseboats; Rs 15,000 for houseboats having two or more bedrooms; Rs 17,500 for one-bed air-conditioned houseboat and Rs 25,000 for houseboats with two or more air-conditioned bedrooms.

ALAPPUZHA EXEMPTED

Given the prevalence of a `special situation' (cancellation of tourist bookings resulting from spread of chikungunya), houseboats in Alappuzha would be exempted from luxury tax for the current year.

Dried ginger, tender arecanut, chicken and tread rubber are being removed from the list of notified goods under the Kerala Value Added Tax Act of 2003.

Contractors doing the works of Kerala Water Authority too will receive the relief from payment of tax on material purchases made from unregistered dealers.

This relief was earlier restricted to those doing the works of Government departments and local bodies.

Manufacturers in general are getting the facility of input tax credit under VAT. Pharmaceutical manufacturers were outside this clause since they enjoy the facility of compounding their tax returns. They too would get input tax credit.

LEVY ON RUBBER

Purchase tax exemption on rubber in the case of manufacturers who transfer their goods out of the State is being withdrawn. The withdrawal of this facility will apply to both rubber and all manufactured goods stock transferred out of the State.

Live chicken and timber purchased from outside the State for sale within the State will not get entry tax refund from now on. The sale of such items within the State was being recorded as having occurred at much lower prices than those adopted for the levy of Entry Tax, requiring constant refunds.

COMPOUNDING TAX

The rate for compounding tax for 2007-08 in the case of gold dealers who opt for compounding facility will be 115 per cent of the compounded tax paid in 2006-07.

These relief proposals were made as the Assembly referred Kerala Finance Bill, 2006, to the Subject Committee.

More Stories on : Budget | Taxation | Kerala

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page