In a move to make up for the Rs 3,500 crore additional burden on state exchequer due to farm loan waiver scheme, the government on Friday increased the Value Added Tax (VAT) rates by 0. 5 per cent. The goods that come under the slab of five and 14 percent VAT will now be charged 5.
5 per cent and 14. 5 per cent respectively. Industrial raw materials, machinery, IT products, declared goods such as iron and steel, spices,tea, coffee, construction materials, hardware, plywood, confectioneries (biscuits, cakes, bakery items), food products, toiletries,disinfectants, cement, hardware and marble will cost more.
The new rates will come into effect from August 1 for a period of one year. The state government hopes to mobilise `1,000 crore by this rate hike.
Chief Minister Jagadish Shettar announced the increase in VAT rates during his reply to the debate on the department-wise demands for the year 2012-13. The Assembly later passed an amendment bill in this regard. However, the state government has withdrawn five percent VAT imposed on plastic woven textile from April 1.
“We are shocked by this announcement. The state should have at least consulted us before taking any decision,” said president of Federation of Karnataka Chambers of Commerce and Industry K Shivashanmugam. The Assembly approved Appropriation Bill with an outlay of `1,07,705.
01 crore for the current fiscal. The Congress and JD (S) members staged a walk out against the government’s refusal to give time to debate on the Finance Bill tabled by CM. The House also approved of Rs 3670. 19 crore supplementary estimations.