UP hikes tax rates, hopes to earn Rs 5 crore more

As the Uttar Pradesh government has hiked the trade tax rates, soft drinks, fruit juices, jam, jelly, beverages, soda and all aerated drinks will be dearer.

The trade tax on non-tobacco pan masala has also been hiked, while relief has been given to bullion traders and jewellers. The Cabinet endorsed the proposal last week.

The trade tax on drinks has been hiked from the present 12 per cent to 25 per cent. This includes soft drinks, laminated and aerated soft beverages, fruit juice, syrup, jam, and jelly. The tax will be levied at the level of manufacturer and importer.

The revised tax has not been imposed at the retail level to prevent the tax evasion. As per government estimates, the hike in tax will turn in an additional revenue of Rs 5 crore.

Trade tax rates on branded and non-branded tea have been rationalised. Earlier the trade tax on branded tea was 10 per cent and on non-branded tea 8 per cent. Now the 12 per cent trade tax has been imposed on both items. The tax has been rationalised to prevent evasion.

In a similar measure for preventing tax evasion, trade tax rates on vehicle tyres and tube flaps have been rationalised at 12 per cent.

Earlier, the tax on vehicle tubes was 12 per cent and 8 per cent on tube flaps. The traders were evading the tax by billing the tyres and tubes as flaps.

The trade tax on non-tobacco pan masala has also been increased from the present 10 per cent to 12.5 per cent. The revised rate of tax will be levied at the level of manufacturer/importer.

Tobacco-mixed pan masala has been exempted from the trade tax and only the entry tax at the rate of 5 per cent is levied on this item.

The Cabinet endorsed the compounding scheme for the bullion traders and jewellers. Under the compounding scheme for the bullion traders, the trade tax at 0.25 per cent will be levied, against the present 1 per cent.

Bullion traders having an annual turnover of Rs 25-30 crore will annually pay a compounding fee of Rs 3 lakh. The UP government has amended the tax structure on bullion trade for preventing the flight of capital to Rajasthan since there also the trade tax has been reduced to 0.25 per cent.

A similar scheme has been approved for the jewellers and the trade tax has been reduced to 0.25 per cent from the present 1 per cent.

The compounding fee on the tent houses renting out tables and chairs and erecting pandals for marriage and other function has been increased by 10 per cent.

The fee is being levied as per the stock held by the tent house. Earlier the lowest fee on a minimum stock of Rs 5 lakh was Rs 500 and it has been revised to Rs 550, while the maximum limit on stock up to Rs 25 lakh has been revised from Rs 39,375 to Rs 43,313.

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Tax changes

The trade tax on drinks has been hiked from the present 12 per cent to 25 per cent

The revised tax has not been imposed at the retail level to prevent the tax evasion

12 per cent trade tax has been imposed on both branded and non-branded tea

Tax rates on vehicle tyres and tube flaps have been rationalised at 12 per cent

The trade tax on non-tobacco pan masala has also been increased from the present 10 per cent to 12.5 per cent