JOIN USDiesel to cost 51 paise less
Diesel will cost 51 paise less per litre from August 1 with Chief Minister Siddaramaiah slashing sales tax on the fuel by 1.1 percentage points but at the same time decided not to roll back Value Added Tax (VAT) slabs which were hiked marginally by the previous government to fund the waiver of crop loan availed by farmers reeling under severe drought.
Siddaramaiah, who also holds the finance portfolio, announced in his budget proposals for 2013-14 that sales tax on diesel will be reduced from the current 16.75 to 15.65 per cent. This would convert to diesel costing less by 51 paise in Bangalore. The reduction would cost the exchequer Rs 300 crore per year. Diesel is governed under the Sales Tax Act and has been kept out of the VAT regime.
VAT slabs had been hiked from 5 to 5.5 per cent and from 14 to 14.5 per cent in August 2012 for a period of one year. The government had hiked the slabs in a bid to mobilise Rs 1,000 crore for drought relief and the proceeds were to fund the crop loan and interest waiver scheme for farmers.
However, Siddaramaiah decided not to rollback the VAT slabs to 5 and 14 per cent. In other words, there will be no change in tax on purchases of commodities. As VAT is imposed on all purchases, there would have been a marginal decrease in prices of commodities had Siddaramaiah effected the rollback. “The amount raised so far has not been sufficient to meet the government’s requirement. Hence with much reluctance I propose to continue the increase beyond July 31, 2013”, Siddaramaiah said.
According to sources in the commercial taxes department, the measure will help the government raise at least Rs 800 crore for the fiscal 2013-14.
Siddaramaiah has proposed to exempt footwear costing up to Rs 300 per pair from tax.
Excepting the demand of sugar traders, Siddaramaiah has decided to withdraw the one per cent entry tax on sugar but at the same time decided to impose one per cent VAT on the commodity.
In a relief to pigmy agents, Siddaramaiah proposed to increasing the annual income limit for exemption from payment of professional tax from the current Rs 36,000 to Rs 1.2 lakh. Siddaramaiah proposed increasing the amount of tax exempt service charges that owners of cinema theatres can collect from Rs 1.50 to Rs 3 per head in air-conditioned theatres and Rs 1 to Rs 2 per head in respect to other theatres.
On the tax administration front, Siddaramaiah said the e-governance initiative for collecting taxes would be strengthened. The chief minister also welcomed introduction of Goods and Services Tax (GST) regime. In a bid for smooth transition to the new tax regime, Siddaramaiah announced the constitution of GST Consultation Committee in the Commercial Taxes Department that would have representatives from all the important stakeholders.
DH News Service