KVAT Budget Highlights

VAT on all types of components, accessories spares and parts including packing materials used by the textile industry will be notified as industrial inputs taxable at 4%. In order to encourage the manufacture of readymade garments in the State the VAT on imported textiles will be abolished. Entry tax on readymade garments will be abolished. VAT on used motor vehicles and cycles sold by dealers of used vehicles will be reduced to 4%. Plastic boxes, cases, crates and similar articles used as articles of conveyance or as packing material will be taxed at 4% retrospectively from 1.5.2005. The benefit of input tax credit will be made available to the transferee when sale of business takes place from one registered dealer to another. The scheme of tax deduction at source will be extended to purchase of iron and steel, hardware, plywood and timber by works contractors. Mosquito repellants and toilet cleaning liquids will be excluded from the scope of insecticides. VAT on vermicelli will be reduced to 4%. VAT on corn cobs/powder/grits will be reduced to 4%. VAT on branded brooms manufactured with grass and natural sticks will be abolished. The requirement of filing the annual VAT statements by traders in addition to monthly returns will be dispensed with. The penalty levied on late filing of monthly returns will be reduced from 10% to 5% if the delay does not exceed 10 days. Section 72(1)(b) Provision will be made for appeals against the revision orders of Joint Commissioners to the Karnataka Appellate Tribunal. Excess claims of input tax credit will henceforth attract penalties. The system of e-filing of tax returns will be introduced selectively during the current year. Luxury tax will be made uniform at 20% for Conference hall in Hotels and marriage halls. (Profession Tax ) The exemption limit of income will be raised to Rs.5000/- per month for salaried employees.

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