Nagesh Prabhu

Bangalore: Consumer goods have become costlier with the increase in the Value Added Tax by one per cent in the State budget for 2010-11.

Chief Minister B S Yeddyurappa has increased the VAT from 12.5 per cent to 13.5 per cent on goods such as cement, air-conditioners, TV sets, electrical goods, furniture, toilet items, soaps and motor vehicles.

Tobacco products become costlier with the increase in VAT from 12.5 per cent to 15 per cent.

However, Mr Yeddyurappa reduced VAT from 12.5 per cent to 5 per cent on goods such as malasa powder mixtures, macroni similar to wheat based vermicelli, trophies, shields and medals used as prizes, all kinds of scrap items, electricity generators up to the capacity of 15 KVA, railway concrete sleepers, school bags costing up to Rs. 200.

He said food materials such as paddy, wheat and pulses would be continued to be exempted from VAT for one more year.

The budget also increased the luxury tax rate from 6 per cent to 8 per cent for hotel room rents between Rs. 1,000 and Rs. 2,000 and from 10 per cent to 12 per cent for rooms with a daily rent of more than Rs. 2,000. The Chief Minister also increased VAT from 4 per cent to 5 per cent on several goods. .

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