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Gujarat VAT & CST

Gujarat Budget 2013-14 – Proposed changes in VAT & Other Tax Rates

[By Shaleen Shah (Partner), with Kirit Rana (Manager) & Kushal Shah (CA Student), VNCA]

The Gujarat Finance Minister placed the Budget for 2013-14 before the State Assembly on 24-Feb-2013. The Budget proposals include the following changes in VAT & Other Tax Rates:

Sr. No.

TOPIC

DESCRIPTION

Existing rates

Proposed rates

1.

LUMP SUM TAX (VAT) FOR SMALL DEALERS

Under this scheme, a dealer having total turnover up to Rs.50 lacs can pay lump sum tax quarterly @ 0.5 % on the taxable turnover instead of calculating the tax on each sale (subject to certain conditions). To extend this simplified scheme to more dealers of the State, it is proposed to increase the total turnover limit of Rs.50 lacs to Rs.75 lacs under section 14.

Turnover limit Rs 50 Lacs

Turnover limit Rs 75 Lacs

2.

MICRO IRRIGATION SYSTEM EQUIPMENTS

To encourage advanced technology of micro irrigation system in agriculture, it is proposed to fully exempt micro irrigation system equipments from current rate of 5% including additional tax.

5%

Exempted

3.

EDUCATIONAL ITEMS FOR STUDENTS STUDIES

It is proposed to fully exempt educational items for study viz. pencils of all types, foot rules, slide rules, mathematical instruments and its box, school color box, rubber erasers and pencil sharpeners, from current rate 5% including additional tax.

5%

Exempted

4.

NEWAR MADE OF PLASTIC

Newar made of plastic fully exempt from current rate of 5% including additional tax.

5%

Exempted

5.

AGARBATTI DUST

At present, agarbatti dust is taxable at the residuary rate of 15% whereas agarbatti is fully exempt. Now, it is proposed to fully exempt agarbatti dust also.

15%

Exempted

6.

CARBON CREDIT

Currently, sales transaction of carbon credit is taxed under residuary rate of 15% including additional tax. In order to encourage the use of carbon credit, it is proposed to include the carbon credit in entry 41 of Schedule II as an intangible or incorporeal goods and make it taxable @ 5% including additional tax.

15%

5%

7.

CIGARETTE

Rate of tax on cigarette made from tobacco is increased from the present rate of 25% including additional tax to 30% including additional tax.

25%

30%

8.

SECOND HAND TWO WHEELERS AND COMMERCIAL VECHICLES

At present, sale of used or second hand motor car by a registered dealer is taxable @ 1% (subject to maximum of Rs.2000). Similarly, now it is proposed to tax sale of second hand (used) two wheelers @ 1% (subject to maximum Rs.500) and sale of second hand (used) medium and heavy duty commercial vehicles @ 1% (subject to maximum Rs.5000) made by a registered dealer.

Motor Cars

1% / Max Rs.2000/-

Motor Cars

1% / Max Rs.2000/-

Two Wheelers

1% / Max Rs.500/-

Heavy Comm. Vehicles

1% / Max Rs.5000/-

9.

LUMP SUM ENTERTAINMENT TAX FOR VIDEO HOUSES

(Gujarat Entertainment Tax Act, 1977)

Currently, owners of video houses are provided an option for lump sum payment of entertainment tax. The intention is to provide relief keeping in view the financial capacity of the poor & labour classes who come to video houses for entertainment. Now it is proposed to restrict this option to video houses which fulfill the following conditions:

(1) The rate for Entry Ticket shall not be more than Rs.30/- per person.

(2) Entertainment (Showing of films) can be provided using any kind of technology.

(3) The maximum number of seats in the entertainment place shall not be more than 125.

(4) There shall not be more than one screen in the premises.

Option available to all Video Houses

Option restricted to small & single screen Video Houses

10.

PROFESSIONAL TAX

(Gujarat State Tax on Professions, Trades, Callings and Employments Act, 1976)

Currently salary and wage earners are liable to pay profession tax as per defined slabs as follows:

- Upto Rs.3000 / NIL

- Between Rs.3000 & Rs.6000 / Rs.20 p.m.

Now it is proposed to fully exempt the salary and wage earners having salaries or wages upto Rs.6000 p.m. The rates above Rs.6000 are unchanged.

Fully Exempt upto salary of Rs.3000 p.m.

Fully Exempt upto salary of Rs.6000 p.m.

11.

ELECTRICITY DUTY ON SELF GENERATION

It is proposed to increase electricity duty on industrial units consuming self-generated power by 15 paise per unit.

40 paise p.u.

55 paise p.u.

The above changes are likely to be effective from 1-Apr-2013.

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