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Karnataka State Budget 2014

The Hon’ble Chief Minister and Finance Minister of Government of Karnataka has presented the Budget for the year 2014-15 today. The highlights of Budget from VAT perspective are given below:

Commercial Taxes

Value Added Tax

  • Reliefs
    • Tax exemption on paddy, rice, wheat, pulses and products of rice and wheat continued for one more year.
    • Reduction in tax on scented arecanut powder excluding mixture from 14.5% to 5.5%
    • Increase in registration limit from Rs.5 lakhs of annual turnover to Rs.7.5 lakhs.
    • Waiver of penalty payable for default in filing of returns by small dealers who have no tax liability and opt for cancellation of their registration.
    • Increase in minimum sale value fixed for obtaining electronic delivery note (e-SUGAM) from Rs.20000 to Rs.25000.
    • Exemption to works contractors from compulsory registration provision.
    • Suitable administrative measures to enable dealers to rectify mistakes in the returns which have no tax implication.
    • Provision for single second appeal against reassessment for several tax periods of one financial year.
  • Additional Resources Mobilization Measures
    • Levy 5.5% VAT on liquor sold by bar and restaurants operating in urban areas and by clubs, lodging houses and star hotels.
  • Rationalisation measure
    • Provision for filing of annual statements by dealers.

Luxury Tax

  • Reliefs
    • Increase in minimum daily rent for taxation from Rs.500 to Rs.750.

Entry Tax

  • Reliefs
    • Tax exemption on ethanol brought for mixing with petrol.
  • Rationalisation measure
    • Provision for filing of monthly returns by dealers and deemed acceptance of such returns as under VAT.
  • Excise
    • Revenue collection target of Rs.14,400 crores fixed for the year 2014-15.
  • Additional Resources Mobilization Measures
    • Increase in Additional Excise Duty on Beer from 122% to 135 %
    • Increase in Licence fee of Primary Distillery, Indian Liquor Manufacturing Distillery and Brewery by 50%.
    • Increase in Licence fee of MSIL retail liquor shops (CL-11C) from Rs.1 lakh to Rs.3 lakhs.
    • Increase in fee for shifting of shops from one place to another, from existing 25% to 50% of the Licence fee charged on the Licence in respect of such shops.
  • Stamps and Registration
    • Revenue collection target is fixed at Rs.7450 crores for 2014-15.
    • Stamp Duty exemption on subsequent sale deed relating to alternate site allotted by the Bangalore Development Authority, consequent to the denotification of the land.
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