The budget of the state will be declared on March 11, 2013. However, additional items like wine may be brought under the ambit of sales tax which at present is not covered.
According to officials close to the development, the relief may be in the form of lowering of value added tax (VAT) on various agricultural allied products which on an average works out to around 12.5 per cent. The VAT will not only lowered on the agricultural products but agricultural equipment and ancillary activities as well, said the sources.
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The plan is to reduce VAT for the dealers and traders of these commodities and related products so that they can pass the benefit to the farmers while purchasing the product.
The relief will be provided keeping in view that the state had witnessed drought in many parts this year during the kharif season. The worst-affected districts of Jalna, Beed, Osmanabad and Aurangabad have received between 25 per cent and 50 per cent of average rainfall. Another 13 districts have received less than 50 per cent and other 11 districts have recorded between 76 per cent and 100 per cent of average rainfall. Only five districts have received more than 100 per cent of the average rainfall, said officials.
Relief for time barring cases
In another relief to the dealers, the government may not extend the date for reopening of assessments for default in sales tax payment under section 23 which gets time barred on March 31,2013. While section 23 deals with assessment, the state government has been aggressively pursuing cases of input tax credit (ITC) claims by dealers. This is especially after the judgement of Bombay High Court which upheld in favour of sales Tax department and stated that no input tax credit will be allowed unless corresponding tax is paid by the selling dealer into the government treasury. Further it clarified that the bills of ITC and tax paid to the treasury will be matched with the electronic matching system.
Thereafter, the department had decided to reopen older cases where the dealers have claimed ITC much in excess of the tax paid to the treasury apart from the current assesses. The defaulters as per the department will be identified as ones who have not paid full amount of tax either by not filing returns or filing but not paying (short filing) or returns filed but sales to concerned dealers are not shown ( undisclosed sales).
This list was being updated since 2008-09 which got time barred in March 2013.
Maharastra Drought relief
Earlier, the state government allotted Rs 150 crore for immediate relief measures last year . Under this, a compensation of Rs 8,000 per hectare up to two hectares was provided to small and medium grape, pomegranate, orange and sweet lime cultivators while large cultivators got compensation amount for only one hectare.
As per state government estimate, there are 6,201 villages where the kharif yield is below 50 paise and 1,552 villages where the rabi yield was below 50 paise.
In the Budget 2012-13, the state of Karnataka, owing to severe drought in the state, has reduced value added tax (VAT) from 14.5 per cent to 5.5 per cent on various items like arecanut dehusking machine, cocoa husk, refractory monolithic powder, supplementary nutrition food for anganwadi centres, domestic containers, soya bean edible oil manufacturing units etc. It has retained tax exemption on paddy rice, wheat, pulses, products of rice and wheat for one more year.