Finance Minister K.M. Mani has proposed to mobilise Rs.400 crore through a 10 per cent increase in the tax rate on Indian Made Foreign Liquor (IMFL) having purchase value of Rs.400 per case or more paid by Beverages Corporation (Bevco).
The Minister, in his Budget speech in the Assembly on Friday, said the hike in tax rate had been proposed in order to ensure affordable cheap liquor in the market to aid the enforcement strategy of controlling spurious liquor.
Foreign liquor other than beer and wine is taxable at 105 per cent and beer and wine at 50 per cent. Tax on liquor is one of the factors determining the price of liquor and its affordability. The hike, he said, was in accordance with the Abkari Policy, under which the government had taken several steps to control excess consumption and availability of liquor in Kerala.
Turnover tax on textile dealers
Mr. Mani also proposed to mobilise Rs.100 crore by levying a turnover tax of 2 per cent on textile dealers having a turnover of over Rs.1 crore or more on textiles, excluding readymade.
The move was in the context of the end to the ban on imposition of sales tax on textiles consequent to the withdrawal of additional excise duty by the Central government.
The levy would not be a burden on the public since the dealers would not be allowed to collect the tax from consumers and would have to pay from their profits, he said.
Mr. Mani proposed to glean Rs.100 crore for paper lotteries by increasing the tax on the draws from Rs.30 lakh to Rs.50 lakh for ordinary draws and from Rs.60 lakh to Rs.1 crore for bumper draws.
Edible oils costlier To protect the interests of coconut farmers, Mr. Mani went back on his tax sops given to all edible oils in his last Budget, by raising rates for all edible oils except coconut oil from the current 1 per cent to five per cent.
Last year, he had reduced the rates from 4 per cent to 1 per cent, but it proved to be a set back to trade in coconut oil. In a single stroke, he had sought to mobilise Rs.80 crore as additional revenue by reaching out to coconut farmers.
The Finance Minister sought to unify the rates of all UPS (Uninterrupted Power Supply Systems) and inverters at 14.5 per cent to mobilise an additional Rs.6 crore. The measure had been brought since tax evasion was taking place by billing invertors as UPS, which had a lower tax rate at five percent compared to inverters at 14.5 per cent.
Mr. Mani said the tax rate of aluminium composite panels, used as a luxury item to decorate posh buildings, residential apartments, and shopping complexes would be increased to 14.5 per cent to net additional revenue of Rs.5 crore.
