Major modifications in Karnataka commercial taxes with effect from 1st April 2015.

I. KARNATAKA VALUE ADDED TAX

The Following commodities have been exempted from Tax from 1.04.2015 to 31.3.2016:

• Paddy, Rice and Wheat

• Pulses

• Flour and Soji of Rice and Wheat and Maida of Wheat

The Following commodities have been exempted from Tax from 1.04.2015

• Footwear of all kinds costing up to five Hundred Rupees per pair

• Handmade Floor mats and runners, utility bags and other utility products made of banana fibre and other natural fibres of agricultural waste, but excluding rubberized fibre products.

Tax on following commodities have been reduced to 5.5%:

• Kerosene wick Stoves

• M-Sand (Manufactured Sand)

•  Mobile Phone Charger whether sold along with the mobile phone in sealed pack or otherwise.

The following goods have been notified as Capital Goods/Industrial Inputs/Packing Materials taxable   at 5.5% VAT:

• M-Sand manufacturing Machinery

• Pallets, Box Pallets and other Load Boards: Pallet collars

• Pre-sensitized lithographic plate.

• Industrial cables namely high Voltage Cable, XLPE Cable, Jelly filled cable, Optical Fibre cable and PVC Cable

VAT rate of 17% has been increased to 20% on cigarettes, Cigars, Gutkha and other manufactured tobacco:

Other Reliefs:

• Increase in registration limit from 7.5 lakhs of annual turnover to Rs10.00 Lakhs.

• Provision made for filing of single first appeal against re-assessments for several tax periods of one financial year.

• Enhancement of period for disposal of appeal by Karnataka Appellate Tribunal from 180 days to 365 days from the date of stay order.

• Provision to claim input tax credit of previous tax periods in the returns filed during the subsequent tax periods by amending the sub section(3) of section 10.

• Granting the permission for special Accounting Scheme to be brought under “SAKALA”

• Enabling the dealers to file Appeal Electronically before the first appellate Authority and to receive orders electronically.

• Enabling the dealers to upload the details of CST Statutory forms which will be linked to the turnover declared by the dealers in their returns

Other Important changes made in Karnataka VAT Act 2003:

• Provision to limit the input tax credit to the extent of output tax paid on the commodities which are sold at a price lower than the purchase price.

• Provision to deduct tax at source, at applicable rate, on the goods purchased by government department/Local Bodies/Other Bodies as may be notified and with effect from the date to be notified.

II. SALES TAX:

• Sales Tax rate of 15.65% increased to 16.65% on diesel.

• Sales Tax rate of 25% increased to 26% on petrol.

III.PROFESSIONAL TAX

• Profession Tax Exemption to Senior citizen who have attained the age of 60 Years.

• Profession Tax Exemption to persons drawing the salaries/wages less than Rs.15000/- per     month.

IV. AGRICULTURAL INCOME TAX                             

Replanting allowance hiked from Rs.900/- to Rs.2050/- per metric ton coffee produced to benefit coffee planters.

Also Read : 

• 7 Tax changes applicable from 1st April 2015

• Highlights of Karnataka State Budget 2015 -16

• How is your tax paid money utilized by the Government of India?

• Beware of penalty on Cash Transactions

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