The Hindu : Front Page : 20 per cent tax for air-conditioners

Online edition of India's National Newspaper
Thursday, Jun 29, 2006

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20 per cent tax for air-conditioners

Special Correspondent

THIRUVANANTHAPURAM: Finance Minister T.M. Thomas Isaac announced an increase in the value-added tax for air-conditioners in the Assembly on Wednesday.

Replying to the general debate on the revised Budget for the current year, the Minister said air-conditioners would be included in the new schedule of goods carrying 20 per cent tax. Items such as dishwashers, health drinks and colas which were proposed to be included in the schedule might not be luxuries, but they were not necessities.

Dr. Isaac said the compounding facility for tax on luxury hotel rooms would not be available this year as a turnover-based tax had been introduced for hotels. It would be mandatory for big contractors to maintain records of their contracts and bills for verification of tax payments.

He said the Government did not actually intend to collect the proposed four per cent tax on gold. Jewellers had been given the option of compounding taxes. This would come to only one per cent of their sales turnover. However, if they refused to pay the compounded rate of tax, they would have to pay a 4 per cent tax on sales.

He said the proposed Debt Relief Commission would not be a permanent one. It would function only for two or three years so as to avoid wrong impressions about the credit system. The proposed Agriculture Commission, he said, would take steps to ensure stability in the prices of agriculture commodities and increase investments in the agriculture sector.

He said the Government would be trying for a consensus on the proposed cess on rubber. A decisions on it would be taken only after consultations.

The Minister said the Government proposed to focus on the mission formed to implement suggestions made by President A. P. J. Abdul Kalam on certain areas. The Government proposed to accord top priority to the development of the proposed hightech corridor and the Technopark.

Referring to the Opposition criticism about the cut in funds for certain schemes, Dr. Isaac said no funds were cut on parochial grounds. He said the Rs.3,000-crore scheme proposed for coastal development was to be integrated with Centrally-sponsored schemes. A package would be prepared for farmers in Idukki district.

He said it would be impractical to bring down the revenue deficit to zero without higher devolution of tax revenues from the Centre. However, steps were being taken to increase revenues significantly.

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