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Kerala budget: fresh taxes to net Rs. 248 crore

Special Correspondent

Budget proposes new stamp duties, change in vehicle tax structure

THIRUVANANTHAPURAM : The Kerala budget for 2007-08 envisages an additional resource mobilisation of Rs.248 crore through new proposals including value added tax (VAT) on cigarettes and tobacco products, new stamp duties and a change in vehicle tax structure.

The budget, presented in the State Assembly on Friday by Finance Minister T.M. Thomas Isaac, also contains relief measures to the tune of Rs.71.56 crore to encourage industry and trade.

The Budget forecasts a total revenue receipt of Rs.21,445.76 crore and a revenue expenditure of Rs.26,696.92 crore, leaving a revenue deficit of Rs.5,251.16 crore. The capital expenditure is put at Rs.1,319.16 crore. Public debt is expected to go up by Rs.5,346.94 crore during the year. Expenditure on new heads will come to Rs.212.13 crore. The Budget carries forward a deficit of Rs.420.25 crore from the current year and expects to close 2007-08 with a deficit of Rs.522.13 crore.

Dr. Isaac proposed revising stamp duty on property transactions done through the `power of attorney' mode. The prevailing rate of stamp duty on a `general power of attorney' is Rs.150. This is expected to bring in an additional revenue of Rs.50 crore.

The Budget proposes amending the Kerala Stamp Duty Act of 1959 to bring de-mat transactions of stocks/shares under the tax net. In the case of Government securities, the transactions will carry a stamp duty of 0.0005 per cent, subject to a maximum duty of Rs.500. In other cases, the duty rate will vary from 0.001 per cent to 0.01 per cent, subject to a maximum duty of Rs.250 per transaction. The Government hopes to raise Rs.10 crore from this new area.

Another new proposal is for levying VAT on cigarettes, tobacco and tobacco products, other than beedi and cigars, at the rate of 12.5 per cent.

The present tax rate of 4 per cent will continue. Dr. Isaac expects additional revenue of Rs.50 crore from this.

He proposed imposing 4 per cent tax on life-saving drugs since the drug manufacturers were not passing on to the consumers the benefit of the tax exemption at present given to such products.

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