Financial Daily from THE HINDU group of publications
Tuesday, Jul 20, 2004
Financial Daily from THE HINDU group of publications Tuesday, Jul 20, 2004 |
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Info-Tech
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Taxation Industry & Economy - Budget Karnataka Budget imposes steep hike in sales tax on hardware, software Our Bureau
Bangalore , July 19 THE State Government on Monday proposed a steep hike in sales tax on computer hardware, software, electronic goods and software services. The ST has been hiked to 12 per cent from the existing five per cent on computer software (including works contract of programming and providing computer software), hardware, peripherals and cleaning kits. For computer consumables, it has been increased to eight per cent from the existing five per cent. "We are extremely unhappy about this hike, which sends wrong signals," said Mr Dhananjay, President of Association for Information Technology (AIT), the IT products' dealers and resellers' association in the State. "Karnataka is the most taxed State for IT products," Mr Dhananjay said adding that his association would soon resort to strong protest against the Government's proposed move. "AIT has close to 1,000 members in the State and we will make sure that our protest is heard loudly," he added. Karnataka, which leads the country's software exports, has become the most IT unfriendly State in the process, Mr Dhananjay said adding the Government's proposed move was unjustified as neighbouring Andhra Pradesh and Tamil Nadu levy a tax of four per cent. "There should be a uniform sales tax across the country," he added. "This steep hike in sales tax was not expected from the Government," said Mr Shridhar, Secretary, AIT. "The Government seems to be more interested in pleasing its vote bank," he said. However, he feared that this steep hike would give rise to illegal trade in the form of grey market. The consumables market in India including that of storage media is estimated to be around Rs 750 crore, of which Karnataka alone accounts for close to Rs 180 crore, Mr Shridhar said. Other items where the Finance Minister, Mr S. Siddaramaiah, plans to raise more revenue by increasing taxes include, electronic integrated circuits and micro assemblies; optical fibre cables; optical fibre and optical fibre bundles and cables; liquid crystal devices and flat panel display devices, besides electronic goods and tools sold to registered dealers.
More Stories on : Taxation | Budget | Karnataka
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