Karnataka budget proposes costlier fuel, liquor, soft drinks

Bengaluru, March 18: Petrol, diesel, beer, liquor and soft drinks will be costlier in Karnataka from April 1, as the state budget for the coming fiscal (2016-17) seeks to hike various taxes on them.

Presenting the budget for the next fiscal, Chief Minister Siddaramaiah told lawmakers in the legislative assembly here on Friday that petrol price would go up by Rs.1.89 per litre, with four percent increase in tax to 30 percent from 26 percent.


"Similarly, diesel price will be 89 paise costlier per litre with increase in tax to 19 percent from 16.65 percent," Siddaramaiah, who also holds the finance portfolio, said in his two-hour-long budget speech delivered in Kannada.

Justifying the increase in fuel taxes, the chief minister said though the central government had increased excise duty three times on petrol and diesel during the current fiscal (2015-16) despite steady fall in crude oil prices in the international market, the state government did not raise tax on them.

While doubling excise duty on beer to Rs.10 from Rs.5 and increasing same duty by Rs.5 on Indian made liquor to Rs.50 from Rs.45, the chief minister has also hiked additional excise duty on liquor by four percent to 12 percent across all the 17 slabs.

"I propose to increase additional excise duty on beer to 150 percent from 135 percent. I also propose to levy an administrative fee of Rs.2 per litre on export and Re.1 per litre on import of spirit, excluding ethanol.

To mobilise additional resource, the budget has increased value added tax (VAT) to 20 percent from 14.5 percent on aerated and carbonated non-alcoholic beverages, including soft drinks and soft drinks concentrates.

The budget also increased motor vehicle tax on transport vehicles to mobilise Rs.121 crore additional revenue next fiscal.

"As the motor vehicle taxes have not been revised since 2010, I have proposed to enhance taxes on private stage carriage by Rs.300 to Rs.900 from Rs.600 per seat, on private city service stage carriage by Rs.150 to Rs.450 from Rs.300 per seat, on contract carriages by Rs.500 to Rs.1,500 from Rs.1,000 per seat," Siddaramaiah said.

Vehicle tax on all India tourist omni buses has been increased by Rs.750 to Rs.3.500 from Rs.2,750 per seat and tax on stage carriages operating on special permit to Rs.1,500 to Rs.1,000 per seat.

"As transport and non-transport electric vehicles are eco-friendly, I propose to exempt them fully from taxes," Siddaramaiah added.

The budget proposals also raise entertainment tax by four percent to 10 percent from six percent collected from multi-system operators and direct-to-home service providers.


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