Friday, February 4 2005 18:57 Hrs (IST) - World Time -

Bangalore: Setting the stage for moving into the VAT regime from this April 1, the Karnataka Legislative Assembly today (Feb 4, 2005) unanimously passed The Karnataka Value Added Tax (Amendment) Bill, 2005 bringing various goods including bicycles, agricultural implements operated mechanically and bamboo under third schedule which stipulated four per cent tax levy.

The amendment contains no major changes barring shifting of some items to schedule three, Deputy Chief Minister and Finance Minister Siddaramaiah said while moving the Bill for consideration and passing.

He said bamboo, children's tricycles and similar articles and parts and accessories thereof including their tyres, tubes and flaps would also come under this schedule.

Siddaramaiah said the Government has decided to exempt petrol including special boiling spirit, liquor, including beer, fenny and wine and rectified spirit from the purview of the VAT and take a decision later.

He said Tamil Nadu has been seeking exemption of tax for rice and the State would also consider after opting similar taxation policy on hearing from the Centre.

Siddaramaiah said it has been estimated that Karnataka would lose Rs 1,800 crore revenue during the first year upon introduction of VAT, which the Centre has agreed to reimburse.

During the second year the Centre would reimburse 75 per cent of losses and 50 per cent in the third year, he said.

Karnataka has also urged the Centre to empower States to levy service tax.

Under the VAT 46 items come under zero tax, 270 at 4 per cent tax and the remaining at 12.5 per cent tax, he said.