The Hindu : Kerala / Thiruvananthapuram News : Proposals for taxation are unconstitutional, says Mani

Online edition of India's National Newspaper
Wednesday, Mar 14, 2007
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Kerala

Kerala - Thiruvananthapuram

Proposals for taxation are unconstitutional, says Mani

Special Correspondent

`State has no powers to impose stamp duty on transfer of vehicles'

K.M. Mani

THIRUVANANTHAPURAM: Kerala Congress (M) leader K.M. Mani said in the Assembly on Tuesday that several taxation proposals in the State budget for 2007-08 were unconstitutional.

Participating in the general discussion on the budget, the KC(M) leader — a former Finance Minister — said the State had no powers to impose stamp duty on transfer of vehicles.

The transfers were governed by the Central Motor Vehicles Act.

No levies could be imposed without amending the Act. The State could not resort to amend the Kerala Stamp Act to impose the duty.

Share transactions

Mr. Mani maintained that the proposed stamp duty on share market transactions was beyond the powers of the State.

Share market transactions came within the Central list, and hence, only Parliament could legislate on it.

He noted that the Centre had dropped only tobacco from the declared goods for Central taxation.

So, Finance Minister T.M. Thomas Isaac's proposal to tax textiles in addition to tobacco was going to be a dream. The proposal to extend stamp duty for transfer of flats, in addition to the land, would lead to buyers paying one-fourth of the price as duty.

This was because the construction of flat involved payment of 12.5 per cent duty for the works contract. Similarly, the proposal to impose stamp duty on registration of documents granting power of attorney would result in Non-Resident Indians paying double the duty when they sell their land through their relatives in Kerala.

He said the Minister's proposal to develop the State Insurance Department on commercial basis could not work.

The Insurance Development and Regulatory Authority Act prohibited its entry into new areas. Otherwise, the Government would have to form a company and pay a heavy licence fee.

A.P. Anil Kumar (Congress) said that most of the concessions announced by the Finance Minister went to traders and industrialists. He had even proposed waiver of Rs.25 crore for the cashew industry though non-payment of the amount was a criminal offence.

Mankode Radhakrishnan (CPI) said the Government had brought about discipline in the education sector. He complained that the budget allocation for the housing sector was low.

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