The Budget envisages a cumulative deficit of Rs. 730.67 crore

The Budget of Kerala for 2011-12, presented to the Assembly on Thursday, exempts cable television operators and house boats from luxury tax. Items sold for offerings inside places of worship and organic fertilizers will also be exempted from tax. Tax on manufactured sand will be reduced to four per cent and compounded tax on house boats rationalised.

Presenting the Budget, Finance Minister T.M.Thomas Isaac said that he was withdrawing the luxury tax of Rs. 5 per connection of cable television, applicable to cable operators with more than 7500 connections. House boats would be exempted from luxury tax on food, conceding the contention of operators that it was difficult to keep accounts of food served. The annual compounded tax on house boats would be rationalised to provide for different rates based on rooms.

While the tax on air-conditioned and non-air-conditioned boats with one room would be Rs. 15,000 and Rs. 8,000 respectively, boats with two rooms would attract tax of Rs. 22,000 (AC) and Rs. 12,000 (Non-AC). Additional rooms would attract tax at Rs. 4,000 for non-air-conditioned rooms and Rs. 7,000 for air-conditioned rooms. The tax on boats used mainly for conferences would be Rs. 30,000 for non-air-conditioned and Rs. 50,000 for air-conditioned boats.

The Minister said that the exemption for pooja materials from tax would have retrospective effect from April 1, 2005. The tax on manufactured sand was being made on par with river sand. The rate of four per cent would also apply to soil and laterite stone. Tax exemption was proposed for organic fertilizers-bone meal, organic meal and leather meal to encourage environmentally-friendly agricultural practices.

Mr. Isaac clarified that all nylon and plastic ropes would stand exempted from tax. Now, only ropes used for fishing were getting exemption. The tax on pressure cookers, reduced to four per cent in 2007, would be applicable to ‘choodarapettys’ also.

He said that bar hotels which had compounded tax continuously for the last five years henceforth need pay at 110 per cent of the tax paid for the previous year and those who had compounded for the last three years need pay tax at 112 per cent of the tax paid for the previous year. This was to keep the scheme attractive. Market consolidation in favour of big players in the gold sector had adversely affects the small dealers. So, special protection of small dealers had become necessary.

Compounded dealer with a turnover up to Rs 10 lakh need only pay the tax paid in the previous year. Dealers with turnover above Rs 10 lakhs and up to Rs. 40 lakh should pay 105 per cent of the tax paid last year. Dealers who had conducted business at least for a year would only be eligible to opt for compounding.

The Budget envisages a cumulative deficit of Rs. 730.67 crore, taking into account the additional expenditure of Rs. 753.41 crore announced in the Budget speech.