Isaac to spare liquor and fuel from tax hike

Isaac to spare liquor and fuel from tax hike

Thiruvananthapuram: Kerala government is unlikely to raise taxes on cash cows liquor and fuel in the upcoming financial year.

Taxes on liquor and fuel as well as stamp duty will not be touched in the upcoming state budget, Finance Minister Thomas Isaac stated as he readies to present this year’s state budget on Thursday.

Stamp duty rates are being spared considering the crisis faced by the real estate sector. Taxes on fuel will not be increased, but the discount of Re 1 on the tax given by Kerala Government when the prices had shot up may be taken away.

There will be no change in liquor tax as the government is often blamed for increasing liquor prices whenever it faces a financial crisis.

With the implementation of the Goods and Services Tax (GST) regime, apart from these three taxes, only Motor Vehicles Tax can be changed by the state.

It is also felt that the amnesty scheme for tax evaders announced in the previous budget has had little impact. As a result, more concessions may be granted this time. While Rs 2,000 crore was the target set for the amount to be collected under the scheme, the actual figure realised was a mere Rs 70 crore.

The budget will list the items on which the additional cess on GST is to be levied. An amount of Rs 1,000 is expected from this cess in two years. Over the last three months, GST collections have grown at the rate of 13%. This year, GST income will rise sufficiently to avoid the need to approach the Centre to fill the deficit.

“The state will resume the collection of VAT (value-added tax) arrears to ensure that the compensation from the Centre does not fall short,” Isaac added.

Kerala budget will be presented on January 31, a day before the Centre’s budget.

A highlight of the upcoming budget will be a special package for rebuilding a new Kerala post floods, according to the Finance Minister, who is now engaged in budget preparations at the Inspection Bungalow, Vizhinjam.

VAT arrears

The next target set by the state is to collect the maximum amount due as taxes, in order to increase revenue. An amnesty scheme is to be announced to collect the VAT arrears of around Rs 6,500 crore from traders who are active as well as others who have wound up their business in the state. According to official figures, there are approximately 8 lakh businesspersons who have run up the arrears.