ST rates on several items shuffled

By R. Gopalakrishnan

CHENNAI, AUG. 18. Shuffling of sales tax rates on several commodities to fall in line with the uniform floor rates agreed to on an all-India basis, imposition of turnover tax on a new slab, levy of entertainment tax on recreation parlours and a proposal to levy entry tax on certain items to be notified later are major features of the Tamil Nadu budget for 2001-02, presented to the Assembly today by the Finance Minister, Mr. C. Ponnaiyan.

While automobiles, synthetic fibres and yarns, cotton, hides and skins, electrical goods, footwear, cellphones, handmade soaps, plastic products, flour of pulses and gram and several items in Part-D of the First Schedule of the Tamil Nadu General Sales Tax Act are covered by higher rates, telecom cables sold to central utilities, silk cotton seeds and paper cups are among the few items that stand to gain by way of a lower rate.

New rates

The following are the restructured tax rates announced.

The ST rate will be raised to four per cent for copra, maize products, man-made fibres and yarns, zari of all kinds, cuminseeds, cotton and dressed skins and hides. Bicycle locks at present charged at 11 per cent and bicycle at one per cent will be taxed at a uniform 4 per cent on a par with other parts and accessories of bicycles.

Eight per cent tax fixed for tractor tyres and tubes, photographic film/plate etc., printing and writing paper, sewing machine parts and accessories, butter and ghee branded and unbranded, footwear branded or unbranded with value above Rs.100, unbranded bakery, confectionery and chocolates, compact fluorescent lamps and cellular telephones.

The present tax exemption in respect of footwear costing Rs.50 or less will stand raised to Rs.100.

Straps of footwear will continue to be exempted. The existing rate of four per cent for unbranded biscuits and exemption for bakeries with a turnover up to Rs.5 lakhs will continue.

Two-wheelers, three-wheelers and four-wheelers other than earthmoving machinery, stainless steel articles other than household utensils and handmade soaps will be taxed at the floor rate of 12 per cent.

Synthetic gems, which are now exempt, will henceforth be charged at one per cent.

The rate on the three existing items in Part-A of the First Schedule, viz, poultry feed supplements and concentrates, parched gram or fried gram and flour of pulses and gram, is being raised from two per cent to four per cent and thereby Part-A is merged with Part-B of the schedule.

The ST rate is being raised to 12 per cent on all items under Schedule-D, excepting butter and ghee sold under a registered brand name, camphor, caustic soda, bicycle locks, other goods not specified elsewhere and unspecified dyes, weighing machines of all kinds, pressure lamps, paraffin and slack wax and animal drawn tyres and tubes, as a measure of rationalisation.

The tax on camphor will continue at four per cent. Unspecified dyes now being taxed at 11 per cent will be taxed along with specified dyes at eight per cent.

``In the budget for 1999-2000, the tax on electrical goods was reduced from 16 per cent to eight per cent with the expectation that there would be an increase in the turnover and compensating increase in revenue.

However it is observed that the attendant revenue has fallen by Rs.18.94 crores. It is therefore proposed to increase the rate for electrical goods to 12 per cent'', Mr.Ponnaiyan said.

Plastic products, which are now being charged at eight per cent, will be charged at 12 per cent, though HDPE woven fabrics will continue to be taxed at eight per cent.

Tax on silk cotton seeds is to be reduced from 11 to 4 per cent and on paper cups from 11 to 8 per cent.

Hand pumps, parts and accessories of kerosene stoves and an additional 12 ``adisarakku'' items widely used by the weaker sections will be exempted from tax.

Parts and accessories of electronic voltage stabilisers will be included with parts and accessories of electronic goods being taxed at four per cent.

The tax on sales to Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam Ltd of telecom cables will be reduced to four per cent under the TNGST Act and also under the Central Sales Tax Act with or without the C Form.

Entry tax

The Finance Minister said with a view to protecting and augmenting State revenue, the ``government will introduce entry tax on certain commodities, materials, articles and goods as may be notified''.

Also ``it is proposed to levy one per cent additional sales tax'' (AST or turnover tax) ``on assessees with a turnover exceeding Rs.10 crores but not exceeding Rs.25 crores per annum''.

``It is expected that all the above measures would result in a net additional revenue mobilisation of about Rs.135 crores in the current financial year'', he added.

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