A cess of ₹1 on petrol and diesel; one per cent tax on rice, rice products and wheat; and five per cent on maida, atta, suji and rava are the highlights of a largely inflationary Kerala State Budget 2015-16.
Finance Minister KM Mani read out the budget to newsmen in the media room of the State Assembly on Friday since rebellious Opposition members did not allow him to read it out on the floor of the House.
Mani proposed additional resource mobilisation amounting to ₹1,220 crore and concessions of ₹145.50 crore which will leave a deficit of ₹848.58 crore.
The cess on petroleum products will generate ₹375 crore and those on rice, rice products, wheat and maida, ₹110 crore.
He recalled that in order to compensate the revenue loss suffered on account of reduction of CST rate from four per cent to two per cent and other tax concessions, the States were allowed to levy tax on textiles and sugar.
Tax on sugar In the last budget, a tax was imposed on textiles. Some of the neighbouring States have since taxed sugar as well.
While choosing to retain the exemption to sugar sold through the Public Distribution System, Mani proposed a nominal tax of two per cent on sugar. The additional revenue expected is ₹100 crore.
Coconut oil will be taxed one per cent to net ₹50 crore.
A negative list existing prior to 2008 is being reintroduced providing for interior decoration and furnishing contracts as additional items.
These contracts will be non-compoundable. The additional revenue expected here is ₹50 crore. The tax of five per cent on transfer of copyright of cinema films too will be reintroduced to generate ₹20 crore.
User charges Beedi will be taxed at 14.5 per cent to raise an additional ₹15 crore.
The benefit of the tax exemption granted to nylon ropes, polyester ropes and polyester twine will be limited to the sales made by Matsyafed, Theeramythri and the Fishermen Cooperative Society. Others will be taxed five per cent, generating ₹3 crore.
Brooms, brushes and mops made of plastic will be taxable at five per cent.
As a measure to tackle the tax drain in sale of live chicken, a one per cent tax will be imposed on poultry feed.
Fees/user charges of various services provided by the government departments are being revised.
Renewal fees For dealers having VAT registration alone and a total turnover of ₹25 lakh and above, the renewal fee will be increased from the ₹500 to ₹1,000.
For others having VAT and CST registration, it will be increased from ₹1,500 to ₹3,000 irrespective of turnover.
Registration and renewal fee under Kerala Tax on Luxuries Act will be raised by 50 per cent (applicable for hotels, halls, auditorium).
The registration and renewal fee for hospitals, home stays and serviced apartments/villas will go up from ₹1,000 to ₹1,500.
For houseboats, the registration fee will be increased from to ₹1,000 to ₹1,500 and renewal fee from ₹500 to ₹750. Additional revenue of ₹10 crore is expected through the above amendments.
All types of plastic toys would be made taxable at 14.5 per cent. This will raise ₹15 crore.
Serviced villas will be treated at par with serviced apartments and made taxable at 12.5 per cent under Kerala Tax on Luxuries Act.
Tax on vehicles The one-time tax on motorcycles having purchase value up to ₹1 lakh will be raised from six per cent to eight per cent; those above ₹1 lakh rupees and up to ₹2 lakh from eight per cent to 10 per cent; and those above ₹2 lakh to 20 per cent.
As a result, the government expects to generate an additional income of ₹100 crore.
Mani intends to impose tax on vehicles registered in other States and operating in Kerala for more than one month. He expects to net ₹20 crore here.
The practice of using luxury vehicles imported from foreign countries for temporary use is on a rise. There is no provision in the existing laws for levying a short time tax on them.
“I intend to impose tax for such vehicles at the rate of ₹10,000 for the first month and ₹5,000 for every subsequent month of stay or part thereof. The government expects an income of ₹1 crore here.”
Stamp Act The Kerala Stamp Act will be amended to include the instrument ‘license for rent,’ as the same has not been included so far. This will attract same stamp duty as that of rent deeds (lease deeds). This is expected to raise revenue to the extent of ₹20 crore.
Stamp duty and registration fee will be rationalised to bring them in line with the changing times. Additional revenue of ₹100 crore is expected from this.
As an incentive for extending banking service in rural areas, the stamp duty for the registration of ATMs in panchayat areas will be reduced to ₹1,250 from the current rate of ₹2,500.