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

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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). Audit | Taxation | Accounting | Legal Advisory | Business Consulting 2 of 6
Other Items on which VAT is reduced are Sr No Types of Products Tax Rates Part B: Major Changes in Luxury Tax: R. SINGHVI & ASSOCIATES Chartered Accountants • Luxury tax on hotels with daily room rents from Rs. 1,000 to Rs.2000 increased from 6 per cent to 8 per cent. • Luxury tax on hotels with daily room rents exceeding Rs. 2,000 increased from 10 per cent to 12 per cent. Part C: Major Changes in Entry Tax: • Provision for collection of Entry Tax on sugar at the point of sale by sugar factories. • Entry tax on entry of tobacco products of all description including ghutka, cigarettes, cigars, churuts, zarda, quimam and others but excluding snuff to 2%. Tax Rates Old New 1 Masala Powder Mixtures 13.50% 5% 2 Macaroni, Sports Trophies, Shields and Medals 13.50% 5% 3 All kind of scraps 13.50% 5% 4 Electrical Generators of less than 15 KVA 13.50% 5% 5 Railway Concrete Sleepers 13.50% 5% 6 Schoolbags costing up to Rs. 200 13.50% 5% Audit | Taxation | Accounting | Legal Advisory | Business Consulting 3 of 6
Page 1: R. SINGHVI & ASSOCIATES Chartered A
Page 5 and 6: Part E: MOTOR VEHICLES TAXES R. SIN

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

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