Highlights of Karnataka State Budget 2010-11 - CHARTERED ...

Highlights of Karnataka State Budget 2010-11
R. SINGHVI & ASSOCIATES
Chartered Accountants
PART A : Major Changes in Karnataka Value Added Tax Act, 2003 effective
from 01-04-10
• VAT is exempted on paddy, rice, wheat, pulses and products of rice and wheat
for another one more year up to 31.03.2011.
• optional scheme for dealers in medicines is introduced to pay tax based on the
MRP even on sale of non medicinal items
generally sold by such dealers.
• Advance Ruling Mechanism for dealers to seek
clarifications and advance rulings to be
introduced.
• VAT is levied on tobacco products on MRP
basis.
Limit for Registration, Tax payment under
composition scheme, Audit under VAT
Increased
• The minimum annual turnover limit for registration increased from Rs. 2 lakhs
to Rs. 5 lakhs.
• The maximum annual turnover limit for opting for Composition Tax Payment
Scheme increased from Rs.15 lakhs to Rs.25 lakhs.
• Annual turnover limit for compulsory audit of accounts of dealers increased
from Rs. 40 lakhs to Rs.60 lakhs.
Changes in Rates of VAT
• VAT rate 4 per cent increased to 5 per cent on all goods except declared goods.
• VAT rate of 12.5 per cent increased to 13.5 percent.
• VAT rate of 12.5 per cent on tobacco products increased to 15 per cent.
• VAT at rate of 13 per cent on sale of motor car exceeding 5 Lakhs.
• Medical dealers will have to pay VAT @ 4% up-to 30th day of Jun 2010. on any
sale of “Medical and pharmaceutical preparations” out of Tax suffered stock
lying as on March 31, 2010 (Notification no. FD 94 CSL 10 dated 31.03.2010).
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