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Karnataka Budget Proposals 2016

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.


 Reliefs

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 Resource Mobilization Measure

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).
  
Rationalization Measures

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.

Rationalization Measure
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.

BETTING TAX
Rationalization Measure

Filing of returns and payment of tax electronically.

credit to Mr. Gurudatta Shenoy
    GDS Associate
    Advocates & Tax Consultants

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