Kerala Budget: Chandy announces tax concessions

Chief Minister Oommen Chandy presenting Budget for 2016-17 on FridayThiruvananthapuram: Kerala Chief Minister Oommen Chandy announced exemption to all companies from paying Agriculture Income Tax next year in his Budget for 2016-17 presented to the Assembly on Friday.

He also unified the tax rate at 30 per cent on par with income tax rate. Current rates are 35% and 50%.

The Chief Minister also extended tax exemption granted to Liquefied Natural Gas including re-gasified LNG for a year to encourage use of LNG.

Cooked food made by prisoners in jail will be exempted from tax with retrospective effect. Earthen pots made from earth clay including flowerpots, receptacles, statues and earthen oven will also be exempted from tax.

Concrete frames for doors and windows are currently exempted. It will be clarified that the exemption would be applicable even if they are fitted with mild steel rods and flats. This will have retrospective effect.

Assistive devices for visually challenged persons such as white cane, electronic cane and braillie printer are currently taxable at 14.5%. Considering the request of the Kerala Federation of Blind, the same will be completely exempted from tax, Mr. Chandy said.

Tax on Automated Robotic Car Parking System is proposed to be reduced from 14.5% to 5% to encourage the investment in the area. Cleaning liquids for removal of pesticide residue from vegetables, manufactured by units that use the technology developed by Kerala Agricultural University or other recognised institutions will be exempted from tax.

The Chief Minister also announced to exempt cardamom sold in the auction centers completely from the VAT considering the steep fall in price of the commodity.

Plantation sector in Kerala, he said, is in bad shape due to steep fall in commodity prices. In the last budget, Rs. 300 crore was earmarked to insure the rubber farmers from the distress and enabled to realize the price of Rs. 150 a kg irrespective of the market prices. This will be continued for another year.

Referring to the demand from Handloom Manufacturing Co-operative societies in Kerala for withdrawal of 1% VAT on handlooms, Mr. Chandy said that the government would grant tax refund to avoid mis-classification and resultant tax evasion.

He said that the Centre had recently withdrawn customs duty exemption to certain lifesaving drugs, bringing additional burden on poor patients. In order to provide relief to them, the State will forgo tax on the said medicines sold through Karunya Pharmacies and Nithi medical stores by providing refund to that extent.