The State government is likely to reduce Value Added Tax (VAT) on biodiesel to 5 per cent from the present 14 per cent so that the alternative fuel will become popular.
Inaugurating the three-day bio-fuel mela organised here by the Karnataka State Biofuel Development Board (KSBDB), Chief Minister Jagadish Shettar said he would consider the request in this regard by the KSBDB and take a suitable decision.
Board chairman Y.B. Ramakrishna told mediapersons that the Commercial Taxes Department had already cleared the proposal seeking reduction in VAT and forwarded it to the Finance Department. He said a decision in this regard was expected within a week.
Presently the VAT on ethanol has been kept at 5 per cent while that of the bio-diesel is 14 per cent. He said there was a need to reduce VAT on bio-diesel to make people use this alternative fuel.
After this, the Board wanted to take up a proposal with the government seeking reduction in VAT on sale of bio-fuel seeds, neem cakes and machinery required for producing bio-fuel.
Even if the Finance Department feels that there could be revenue loss due to sharp reduction in VAT, the Board would convince it about the need for it as society at large would be benefitted by this move, he said.
Addressing the gathering, the Chief Minister stressed the need for popularising cultivation of bio-fuel-yielding plant varieties in drought-prone areas as these varieties were drought-resistant. This would ensure some kind of regular income for farmers even during the distress period, he noted, while terming this as one of the effective solutions for tackling drought.
Mr. Shettar assured the Board of considering its request for increasing its grant by Rs. 14 crore to help cover more farmers under the Suvarna Bhoomi scheme of growing bio-fuel plants. He said that Rs. 50 crore had been given for covering 65,000 farmers under the scheme. However, 72,000 farmers had enrolled themselves under the scheme following which the Board needed an additional Rs. 14 crore to cover all the farmers who have enrolled under the scheme.
Referring to the initiative by the KSRTC, which is running about 2,000 buses on diesel blended with bio-fuel, Mr. Shettar said the corporation was keen on bringing more buses under this scheme if the Centre gave formal recognition to such a green initiative.
Home Minister R. Ashok, the former Union Minister for Rural Development Anna Saheb Patil, Board Managing Director A.K. Monappa, Chhattisgarh Biofuel Development Authority Executive Director Shylendra Shukla, Secretary to Karnataka Rural Development and Panchayat Raj Department Shalini Rajneesh were present.