Financial Daily from THE HINDU group of publications
Thursday, Feb 12, 2004
Industry & Economy
Agri-Biz & Commodities - Income Tax
TN: Agricultural I-T for plantation sector scrapped
Chennai , Feb. 11
THE Tamil Nadu Government has done away with agricultural income-tax for the plantation industry.
Presenting the budget for 2004-05, the Finance Minister, Mr C. Ponnaiyan, said that the move was to support the industry and to save on cost of collection that had exceeded the tax collected.
The fall in the price of plantation products and increasing costs of production have affected the sector and revenues have dropped. Agricultural income-tax has dropped to Rs 1.6 crore in 2002-03 from Rs 39.40 crore in 1997-98. The estimated tax yield for 2003-04 is Rs 1.35 crore against the expenditure of Rs 1.6 crore on tax collection.
The Government has also done away with the one per cent resale tax on sale of consumer goods by cooperatives.
Mr Ponnaiyan has announced a concession on interest on sales tax default. Against 24 per cent a year being levied on sales tax payment defaults, defaulters will now have to pay 1.5 per cent a month on tax amount due for first 90 days and two per cent subsequently.
The Central Sales Tax (CST) rate for computer peripherals and spares has been reduced to two per cent from four per cent.
Hosiery industry has also received a concession under a new scheme to reduce CST to an effective rate of one per cent on inter-State sales to unregistered small buyers. Since `C' form has been made mandatory in 2002, the industry attracts 10 per cent CST on sales to small buyers who cannot submit the form. Therefore, the Government will collect 10 per cent but refund nine per cent of the tax.
Sales tax exemption has been granted to a range of drugs including 10 used for treating AIDS patients and CAPD fluids (Continuous Ambulatory Peritoneal Dialysis) used for treating renal failures, which have been included in the list of life-saving drugs.
Tax rate on pollution control equipment is to be rationalised to a common rate of four per cent.
The State Government has brought down the sales tax on natural gas sold by ONGC to GAIL (India) Ltd to four per cent specifically for the quantity intended for sales to the Tamil Nadu Electricity Board. ONGC sells gas to GAIL (India) for marketing and pays eight per cent sales tax. When the latter sells the gas to TNEB there is a resale tax of one per cent. The concession has been granted since TNEB is entitled to pay four per cent on all its purchases.
Sales tax on handicrafts has been reduced to two per cent from four per cent, and on limestone for use in poultry feed to four per cent from 12 per cent.
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