Innovative idea of taxing weddings by Government of Karnataka

Topic: Taxed Weddings

Vision without action is a daydream; action without vision is a nightmare

If there is an Award for ‘Innovative Idea of the Year’, for the year 2014, it should go to Mr. Siddaramaiah, the Chief Minister of Karnataka.

The Government of Karnataka wants to levy Luxury Tax on Weddings. The definition of Luxury Weddings, according to them is “wedding budget exceeds Rs 5 lakh and the attendance of guests and invitees crosses 1,000”

Maybe an excellent idea; though I disagree with it. For the sake of this article, let us assume that they want to levy taxes; how they will find out whether 1000 people turned up to the wedding?

Action Plan:

Step 1: Government will ask the Secretary of Social Welfare to draw the Rules

Step 2: The rules for Counting Number of guests may include the following –

• Bride’s Father has to register the wedding under ‘the shops and Establishment act’
• Once they register under this Act, they have to maintain Attendance Register, where everyone attending the wedding have to sign
• As a double check measure, they will ask the Marriage Halls to install Biometric Attendance System
• Bride’s father has to file annual return about the number of people who attended the function
• The formula for computing 1000 people is [Total people attended (reception+ wedding)] – (Close relatives# + Paid workers + marriage hall staff + Cooks) – [(Number of guests who attended both reception + wedding) divided by 2]
• # close relative includes bride’s father’s and mother’s lineal ascendants and descendents + bridegroom’s father and mothers’ lineal ascendants and descendents
• The rules are not very clear about whether people who attended the engagement are to be considered while counting 1000 people
• The Inspectors of Luxury tax department can conduct surprise checks during the wedding and reception days. They are authorized to count the number of guests attended either by way of head count or by way of counting used plates at dining hall.

Step 3: the rules for arriving the total amount spent may include the following –

• Jewellery cost including those purchased during the childhood of the bride and bridegroom
• Saree and other dress materials bought for all the close relatives
• All expenses incurred by both Bride and Bridegrooms during the wedding including the amount spent during engagement
• The formula for calculation is [Total amount spent minus(-) the cost of unused provisions such as rice, dal, vegetables, etc minus (-) the total amount received as gifts minus (-) the value of gifts received in kind]
• The brides’ father (read as mother in his absence) has to keep the record of expenses, respective bills (or vouchers) and maintain books of accounts. If the total cost exceeds Rs.10 Lakhs, get it audited by a qualified accountant.

Mr.Siddu, I am not as intelligent as you in the areas of Finance and Economics. But by common sense, I want to know the purpose of levying taxes.

According to me, if you allow people to spend more money, don’t you think it will benefit the economy? 

For example:

• If they spend more on flowers, will it not help floriculture?
• If they spend more on vegetables, will it not help our farmers and traders?
• If the invite more people, will they not pay more to catering people? Will it not help them?
• If more guests turn up, more will be the purchase of sarees, cosmetics, dress materials, footwear, gifts, etc

First of all, who will spend more money on weddings? Those who are having black money, isn’t it?  If you restrict their spending, what they will do with the money –

• Either they will hoard cash below their bed or somewhere at home
• Or they will invest in land. How this will help the economy?

Secondly, will the people who are spending black money show you or your inspectors the total expense over Rs.5 Lakhs? If they show and pay Luxury tax, won’t they know that Income Tax department will come behind them?

By taxing them, you will only discourage people spending more money. Other way round, I feel the government has to give incentive to the people when they spend more money to help the economy.

I understand from your statement, the taxes collected will be distributed, Rs.25,000/- each for wedding of poor families. Even if you levy tax and use it for the purpose of creating infrastructure, water or even constructing toilets, your idea could have been accepted. But Mr. Siddu, I am not convinced with your great grand idea.  If you have to learn from the policies of Kerala government, please pick up something worthwhile!

Vision without action is a daydream; action without vision is a nightmare

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