Kerala - Thiruvananthapuram   

25% tax on aviation fuel

THIRUVANANTHAPURAM: Finance Minister T.M. Thomas Isaac told the Assembly on Thursday that the government proposed to retain tax on aviation fuel at 25 per cent.

Replying to the debate on Finance Bills, the Minister said the budget proposal for reduction of the tax to four per cent was being dropped since the airlines did not respond with reduction in fares.

Dr. Isaac said that tax exemption for goods purchased for projects financed from MLA funds was not under consideration of the government.

The government was thinking of restructuring of the system for appeals against tax assessment.

He said that tax arrears amounting to Rs.8,000 crore due from lottery operators could not be collected now in view of a Supreme Court order. The order had retrospective effect. If the previous government had acted in time, Rs.5,000 crore and interest on that could have been collected. The present government had issued notice for collection of the same as soon as it came to power. But the court order prevented it from realising the amount.

Refuting Opposition criticisms, the Minister said funding for the medical insurance scheme proposed by the government would be over and above the budgeted funds for the health services. About 20 insurances companies had expressed interest in bidding for the scheme. The terms of the bids were specified by the Centre and that could not be altered by the State.

After the Minister’s reply, the House referred the Bills to the Subject Committee. The Bills are for giving effect to the budget proposals of the government for the current financial year.

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