Business Line
Thiruvananthapuram, Jun 24: Targeting the rich with additional tax burden, the Kerala Finance Minister, Thomas Issac, on Friday presented in the State Assembly a revised budget for 2006-07 showing an overall deficit of Rs 716.56 crore.
Presenting the first budget of the Marxist-led Left Democratic Front (LDF) Government, the Minister said several corrective measures were proposed in the revised budget as the one presented by the previous Congress-led Government in February lacked clarity and was an unrealistic one. |Jet-Air Sahara merger deal grounded|
Dr Issac said the Government proposed to hike the tax structure that would only affect the rich section of the society. Similarly steps would be taken to strengthen resource mobilisation. "I am inspired by the Venezuela experience where the revenue income has gone up substantially after the successful people's intervention campaign," he added.
The revised budget shows a revenue income of Rs 19,140.04 crore as against Rs 18,287.24 crore proposed in the original budget. The revenue expenditure would be Rs 24,554.82 crore with a revenue deficit of Rs 5,414.78 crore. In the budget presented by the UDF Government, the revenue deficit was shown as Rs 4,731.70 crore.
However, the overall deficit was brought down to Rs 716.56 crore as against Rs 771.83 crore projected in the original budget proposals. As per the new tax proposals, the tax on gold ornaments would go up to four per cent from the present one per cent tax. Though the annual turn over in the gold market in Kerala was projected to be Rs 10,000 crore, the State Government got tax revenue of only Rs 21.26 crore during 2005-06. So, steps would be taken to correct the anomalies.
The prices of luxury items like oven, refrigerator, vacuum cleaners, washing machines, wall floor tiles, marbles, granite slabs, paints, sanitary wares, health drinks like boost, bournvita, complan, horlicks, mineral water and soft drinks, would go up substantially as a 20 per cent tax was imposed on such items.
Pointing out that several Latin American countries and China used lottery system to encourage people to seek bills for every purchase, Dr Issac said the Government proposed to give a lottery ticket for each purchase of over Rs 1,000. A sum of Rs 10 crore would be earmarked for the purpose.
He said the bill should be made compulsory for all the sales above Rs 100 and a fine of Rs 1,000 or double the tax amount, whichever is higher, would be imposed.
While the prices of gum, insect repellent and glass fibre would go up with a tax of 12.5 per cent, hearing aids, dialysis equipments, blood tubings and certain other life saving equipments will cost less. The tax of such equipments would be reduced to fo ur per cent from 12.5 per cent.
In view of the crisis in the coconut sector, coconut would be exempted from the purview of VAT for a year. Similarly, coffee, tea, cardamom and pepper growers, except the companies in the field, would be exempted from agriculture tax for a year. However, if the prices of rubber continued to stay above Rs 100 per kg for three months, the Government would impose a cess on the rubber plantations.
A 15 per cent luxury tax would be imposed on hotels, clubs, resorts, house boats, marriage halls and convention centre.