By IANS,
Bangalore : In what may be the first of its kind initiative in the country, the Karnataka government Thursday decided to hike lifetime tax on vehicles to slow down the alarming rate at which personalised vehicles were being added every year in urban areas, causing traffic chaos and pollution.
Presenting tax proposals in the revised budget for the fiscal 2008-09, Chief Minister B.S. Yeddyurappa told lawmakers in the legislative assembly that the lifetime tax on all passenger vehicles except two-wheelers would be increased by two percent.
“To meet the increasing expenditure on development and maintenance of the road network in the state, I propose to pass some of the burden on users of cars and multi-utility vehicles. It is necessary to slow down the alarming rate at which vehicles are being added in urban areas, causing traffic jams and pollution,” Yeddyurappa said presenting the maiden budget of the Bharatiya Janata Party (BJP) government.
Lifetime tax on vehicles costing less than Rs.500,000 will be increased to 12 percent from 10 percent. On vehicles priced between Rs.500,000 and Rs.1 million, the tax will be 13 percent instead of 11 percent, and for vehicles priced above Rs.1 million, the tax will go up to 16 percent from 14 percent.
“The revised lifetime tax on passenger vehicles is expected to yield an additional revenue of Rs.1 billion per year,” Yeddyurappa, who also holds the finance portfolio, pointed out.
As part of additional resource mobilisation, the forest development tax will be extended to private mining and quarrying operations in forest areas to raise Rs.1.5 billion per year. Presently, the tax is levied on state-run firms.
To aggressively promote growth of wineries and wine production in the state, the licence fee for setting up a winery has been reduced to Rs.5,000 from Rs.50,000. Similarly, fee for a tavern license has been fixed at a nominal Rs.1,000.
“It is hoped the liberalised taxation on wines and the promotional efforts of the state wine board will take firm roots benefiting thousands of grape farmers in the state,” Yeddyurappa noted.
Interestingly, the state government has decided to permit opening up of 1,000 additional liquor shops and 500 additional bars and restaurants across the state through licenses.
“Additional liquor shops and bars will help consumers in rural areas from commuting long distances to obtain IML (Indian made liquor) for consumption after sale of arrack (country liquor) was banned last year,” the chief minister noted.
The state also decided to permit transfer of licenses from urban to rural areas and from one place to another in rural areas within a district to facilitate opening of shops in unreserved areas.
On the industrial development front, the government plans to develop six special industrial zones under public-private partnerships (PPP) for optimal utilisation of natural and human resources in the state. The state will contribute about Rs.5 billion towards the development of these zones.
A steel zone will be set up in north Karnataka comprising Bellary, Koppal, Raichur, Bagalkot, Haveri and Gadag districts. Similarly, a cement zone will be established for Gulbarga, Bagalkot, Chitradurga, Belgaum and nearby districts. A food zone will be set up for Bangalore rural, Kolar, Shimoga, Bagalkot,Bijapur, Davengere and other districts.
An IT-biotech zone will span Mysore, Mangalore, Hubli-Dharwad, Belgaum, Shimoga and Gulbarga districts. Ramanagara, Shimoga and Hubli-Dharwad will be earmarked for an automobile zone and a garment zone will come up in Bangalore rural, Tumkur, Kolar, Mandya, Belgaum, Bidar and Dharwad districts.
“To promote the IT-BT industry beyond Bangalore and Mysore, I propose to set up new knowledge centres in two zones comprising tertiary areas by giving exemption from stamp duty, reduction in registration charges and waiver of conversion fee as per the guidelines in the new industrial policy of the state (2006-11),” Yeddyurappa added.