Kerala budget for the year 2016-17 was presented on 12-2-2016 in the Legislative Assembly. The proposals of the Government of Kerala for the financial year 2016-17 will come into force from 1-4-2016. Being election year for the assembly, new proposals enhancing the rate of tax is not made by the present Government.
As part of e-governance programme, the submission of the returns under VAT and the payment of tax is made through the system and it is in force for the last few years. E-payment of advance tax and downloading of the statutory forms under CST has already been implemented.
• The Finance Bill has brought amendments in the following enactments.
1. The Kerala Stamp Act
2. The Kerala Land Tax Act
3. The Kerala General Sales Tax Act
4. The Kerala Motor Vehicles Taxation Act
5. The Kerala Tax on Luxuries Act
6. The Kerala Value Added Tax Act
7. The Kerala Surcharge on Taxes Act
The amendments to the following Acts are discussed:
1. The Kerala General Sales tax Act
2. The Kerala Surcharge on Taxes Act
3. The Kerala Tax on Luxuries Act, 1976
4. The Kerala Value Added Tax Act
The Kerala General Sales Tax Act (KGST)
KGST Act is presently applicable to petroleum dealers and foreign liquor, ganja and opium traders. Suitable amendments are being brought in, to enable dealers to file the same in electronic mode as well as to make online remittance of taxes and also generation of statutory forms.
The Kerala Surcharge on Taxes Act
New sub-section 1AA to Section 3 of the Act inserted whereby tax payable u/s. 6 of KVAT Act shall with respect to sale of water, soda, soft drinks, fruit juices and other beverages whether aerated or not intended for human consumption and sold in containers of plastic but excluding sold in such containers of and above 20 liters, be increased by a surcharge of 5% on the output tax due.
The Kerala Tax on Luxuries Act, 1976
A new proviso has been inserted not to levy luxury tax on hostels run directly by educational institutions and working women hostels run by religious and charitable institutions registered under the Travancore-Cochin Literary, Scientific and Charitable Societies Registration Act, 1955.
The Kerala Value Added Tax Act, 2003 (KVAT)
• All types of plastic carry bags including non-woven polypropylene bags – Rate of tax @ 20%.
• The exemption for sale of natural gas in any form is extended to 31-3-2017 from 31-3-2016.
• Sale of cardamom, at the point of auction, conducted at the auction centre holding a valid licence shall be exempted from tax.
• Cooked food manufactured by prisoners and sold by Kerala Prison and Correctional Services Department exempt from tax.
• Works contract of robotic or automated car parking systems, shall be 5%.
• Limit for presumptive tax enhanced to
Rs. 75 lakh from Rs. 60 lakh.
• In the case of works contract awarded by Government of Kerala, KWA and local authorities, compounding in the case of unexecuted work as on 31-3-2014, the contractor may continue to pay tax in respect of such works in accordance with the provisions of this clause as existed when he opted for compounding up to 31-3-2016.
• Section 25D special provision introduced for bakery dealers to settle arrears.
• Changes in schedule rates
• Sch I – 0%
• Braille printer
• Assistive devices for visually challenged light white cane, electronic cane
• Cement or concrete frames for doors and windows with/without MS Rod and MS Flat w.e.f 1-4-2005.
• Cleaning liquids for removing pesticides residue from vegetables manufactured by units using the technology developed by Kerala Agricultural University or other recognised institution.
• Earthern pots made from earth clay including flower pot, receptacles, statues and earthern oven.
• Sch III – 5%
• Mobile phone charger sold along with mobile phone in sealed pack w.e.f. 1-4-2005
• Once the dealer detects any omission or mistake in the monthly return filed, he shall file a revised return within 2 months. If there is any additional tax to be paid by such revision, it shall be paid with interest @ 3% per month plus penal interest at twice the rate.
• The registration under KVAT is made mandatory for C&F agents, transport agents and shipping agents.
• Entities doing e-commerce business will have to furnish details of goods movement into and outside the state. They will also have to take registration.
• The time limit for completion of assessment up to 2010-11 is now extended beyond 31-3-2016. Prescribed time limit as per the section is only five years. It is now 15 years after the introduction of VAT. The purpose of fixing time limit for completion of assessment is totally lost by such extensions at the whims and fancies of the department for their own inefficiency.
• Renewal of registration for the year 2016-17 has to be done on or before 30-4-2016.
o Application for renewal has to be made in Form 5. This is to be filed online. Dealers will have to renew the registration online and keep their registration live for the year 2016-17 before 30-4-2016.
o Renewal fee has to be paid online.
FEES FOR RENEWAL
The renewal fee of VAT registration is as rates mentioned below:
• Dealers with registration under both KVAT and CST –
• Dealers with registration under KVAT only and whose total turnover is upto
Rs. 25 lakh in 2015-16 – Rs. 500/-
• Dealers with registration under KVAT only and whose total turnover above
Rs. 25 lakh in 2015-16 – Rs. 1,000/-
Branch Registration renewal –
Rs. 150/- for each branch.
The annual return for the year 2015-16 will be self generated as per the monthly returns filed. Dealers can verify the turnover of their purchases and sales with their books of account and monthly returns filed. This will help dealers to revise their return if the need arises. The due date for generating and filing the annual return is 31-5-2016.
Time limit for filing revised return as per the provisions of the Act is two months. Any extensions beyond two months can the done only with the permission of the Dy. Commissioner of the respective district. Due to heavy requests for revision from the dealers for revision of the returns there is huge back log for issuing sanctions.
• Form 53 – Statement of closing stock inventory as on 31st March 2016. This is also to be e-filed within the due date of filing of annual return. Even for dealer’s who do not have closing stock, they are expected to file ‘nil’ stock statement.
• Claim for refund of input tax / excess amount remaining unadjusted at the end of the year shall be filed on or before 30-6-2016 in Form 21CC to the assessing authority along with closing stock inventory in Form 54.