Karnataka hikes VAT by 0.5 per cent, goods to cost more
July, 30th 2012
Several consumer goods, including electronic items, will cost more in Karnataka in the wake of government increasing VAT by 0.5 per cent on Friday which would help it to mobilise an additional Rs. 1,000 crore in tax revenue.
"The VAT rates of five per cent and 14 per cent will go up to 5.5 per cent and 14.5 per cent respectively to raise additional resources", Chief Minister Jagadish Shettar announced in the assembly while replying at a debate on demands for grants of various departments, which the opposition Congress opposed.
"These rates are proposed to be increased for a period of only one year with effect from August one, 2012", Mr Shettar who also holds finance portfolio said.
According to an official of the Commercial Tax Department, most of the consumer goods come under these two slabs and the rates will go up.
The House also approved the Karnataka Value Added Tax (2nd Amendment) Bill, 2012 in the absence of opposition parties, which had staged a walkout, to give effect to the changes in taxation structure.
Mr Shettar in his hour-long reply also announced that the existing limit of 20 kms road being developed under "Namma grama, Namma raste" scheme will be enhanced to 30 kms in each of the assembly constituency, an announcement that was greeted with thumping of desk by legislators of all parties.
Mr Shettar who is facing the assembly for the first time as finance minister after he took over as Chief Minister, said the state's financial health was sound and its fiscal management was one of the best.
Unsatisfied by his reply, Opposition Congress led by its leader Siddaramaiah staged a walkout and JDS followed them.
The House witnessed a dharna by opposition parties after Speaker K G Bopaiah went ahead with putting to vote the Supplementary Estimates (first instalment) ignoring their pleas that the chief minister provide an explanation over the Rs. 3500 crore expenditure.
By the time the opposition members returned to the House after their walkout over budget reply, the Speaker had taken the Supplementary Estimates for consideration and this sparked off heated exchanges between the ruling and opposition side.
The house also approved the Karnataka Appropriation Bill (No2) by voice vote. Mr Shettar said the Rs. 25,000 loan waiver would benefit those who availed loans between September one, 2011 and June 25, 2012.
He rejected Mr Siddaramaiah's demand for crop loss compensation to farmers.
Mr Shettar urged Congress leaders get Rs. 2000 crore from the Centre to help farmers in drought hit areas.