ST floor rates from today

By Our Special Correspondent

THIRUVANANTHAPURAM, DEC. 31. The new uniform floor rates for sales tax would come into effect in Kerala from tomorrow, with the Finance Minister, Mr. T. Sivadasa Menon, promising to invoke if necessary the relevant provisions of the Kerala General Sales Tax Act to prevent petroleum prices from going up in the State.

The Governor, Mr. S. S. Kang, issued the Kerala Taxation Laws (Amendment) Ordinance, 1999 today to give effect to a decision of the Chief Ministers and Finance Ministers conference in November to bring about uniform sales tax regime.

At a press conference, Mr. Menon announced that the surcharge on sales tax has been withdrawn as part of the moves to rationalise tax rates. The surcharge has been included in the new tax rate calculations, he added.

There are now 17 tax rates in Kerala. This has been reduced to four slabs, in addition to two special slabs. The slabs are of four per cent, eight per cent, and 12 per cent, and 20 per cent while the special slabs include one per cent and above 20 per cent. The Minister said the Government had fixed the floor rates after a comparative study of the prevalent rates in the southern States. In view of the reduced number of slabs, the rates for certain commodities have been rounded off to the next slab, but there would be no additional tax burden on the consumer, he added.

Mr. Menon said that even though the all India floor rate for pasteurised milk had been fixed at 4 per cent, it would not attract any tax in the State. Life saving drugs and garments would not attract any tax, while essential items like other medicines, food grains, agricultural implements, LPG, and rice have been left untouched. The sales tax rate for kerosene has been reduced from 9.7 per cent to 8 per cent. The tax rates of cement, electrical goods, asbestos, tyre, tube, paint, rubber products, tooth powder and tooth paste have come down.

The following are the items which come under zero rate: fruits, vegetables, milk, meat and fish products, egg, flowers, marine products, garments, hotels other than bar, star hotels with a turn over of Rs. 5 lakhs, food stuff, organic fertilisers, life saving drugs, sugar, salt, bread and buns (unbranded)

Rice, wheat, and other grains would carry one per cent tax, while grocery items, aluminium, utensils, bricks, tiles, edible oils, fertilizer, pesticides, cattle feed, computer, ginger, dry ginger, matches, packing materials, pulses, branded salt, bread, bun, agricultural implements, maida, rava would carry four per cent tax.

Kerosene, cash crops like arecanut, cardamom, pepper, forest produce, medicines, newsprint, paper products, pickles, readymade garments, sewing machines, handmade soap, spectacles, spares parts of vehicles, tea, electronic items, electrical gadgets and products, turmeric, umbrellas, tyre, tube, wireless equipment, X- ray equipment, acids, bakery items, and other unclassified items would attract eight per cent tax.

Items coming under the 12 per cent slab include, all items listed in the fifth schedule, cement, battery, branded biscuits, cement products, machinery, milk products, motor vehicles, paint, plastic and plastic products, pressure cooker, water heater, rubber, rubber products, soap other than hand made ones, television, suitcases, brief cases, leather products, slippers, toys, thermos flasks, watches, clocks, sanitary equipment, branded coffee power, chocolates, and sweets.

The items coming in the 20 per cent slab include arms, including pistols, rifles, revolvers, air guns, pellets and ammunitions, shaving stick, cream, after shave lotions, deodorants, and toilet paper, squashes, sauces, soda, mineral water, Horlicks, Boost Bournvita, Complan, Glucose D, Glucovita, and similar items whether bottled, canned or packed, shampoo, talcum powder, other perfumes and cosmetics, tooth powder, tooth paster, whether medicated or not and tooth brush.

Under the special rates, wine has been removed from its classification as hard liquor and its tax rate has been reduced and brought on par with beer. The rate for beer and wine is 55 per cent. In the case of foreign liquor other than beer and wine, the rates have been fixed at 85 per cent, up from the prevalent 82.5.

The Minister, who was accompanied by the Finance Principal Secretary, Mr. Vinod Rai, Commissioner for Commercial Tax, Mr. John Mathai, and Joint Commissioner, commercial Taxes, Mr. Anil Kumar, said that nine new items, which were under the zero tax regime have been brought under the tax regime. These include agriculture implements, handicraft produce, Khadhi and village industry units. Units up to a turnover of Rs. 10 lakh would be exempt from tax. Among the other items which have come within the purview of the tax regime include pesticides, outboard motor engines, readymade items and towels. Duty free shops at the airport would have to pay sales tax, while 50 per cent sales tax would be levied on products sold through military and NCC canteens.

Another important decision is to end tax concessions to new industrial units. However, those enjoying the benefits would not be affected and would continue to enjoy them till their term is over. The sales tax concessions now available for SSI units would continue and the tax rate would be 8 per cent, Mr. Menon said.

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Section  : Regional
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