Karnataka State Budget Highlights 2013-14

Honorable Chief Minister of Karnataka Shri Jagadish Shettar presented the budget for the year 2013-14 on 8th February 2013. Following are the proposals made in the budget with respect to VAT.

The VAT rates increased from 14% to 14.5% and 5% to 5.5% with effect from 1^st August 2012 will end in 31^st July 2013 and the VAT rates will be reduced to 14% and 5% form 1^st August 2013.

Reliefs

• Tax exemption on paddy, rice, wheat, pulses and products of rice and wheat continued for one more year from April, 2013
• Tax on arecanut dehusking machine reduced from 14.5% to 5.5%.
• Tax on cocoa husk reduced from 14.5% to 5.5%.
• Tax on Refractory Monolithic Powder reduced from 14.5% to 5.5%.
• Taxation scheme on soya bean edible oil manufacturing unit suitably modified.
• Tax on purchase of supplementary nutrition food made under the Integrated Child Development Scheme for supply to Children, pregnant women / nursing mothers and adolescents by Anganawadi Centres run by Women and Child Welfare Department, reduced from 14.5% to 5.5%.
• Tax on domestic containers reduced from 14.5% to 5.5%. 
• Footwear costing up to two hundred rupees per pair exempted from tax.
• Tax on doors and window frames and door and window shutters made from waste plastic reduced from 14.5% to 5.5%.
• Air compressors and their parts including engines included in the list of capital goods liable for 5.5% tax.
• Payment of 50% of disputed amount currently required to be made by the dealers for filing appeals against orders demanding tax in excess of the amounts declared by them and for obtaining stay for its recovery reduced to payment of 30%.
• The current time of ten days given for payment of additional tax demanded on assessment and reassessments increased to thirty days.

Entry tax Relief

Threshold of two lakh rupees for registration under Entry Tax Act increased to five lakh rupees.

He also stated that the State Government will support the implementation of Goods and Services Tax (GST) to reduce the complexity in taxation system of commodities and services by removing the cascading effect of taxes leading to lower prices and better compliance.