Smoking, chewing tobacco and drinking will be more expensive while ready-to-eat chapatis and paranthas will be cheaper in Karnataka from April.
Presenting a revenue surplus budget for 2012-13 on Wednesday, chief minister DV Sadananda Gowda told legislators that sales tax on diesel would be reduced to 16.75% from 18%.
"I propose to levy (charge) five% value added tax (VAT) on beedies and increase it by two% on tobacco products to 17% from 15%. But VAT on ready-to-cook chapathi and parantha, will be reduced by nine% to five% from 14%," Gowda said in his maiden budget speech in Kannada.
The chief minister, who also holds the finance portfolio, has proposed to drastically reduce sales tax on high speed diesel sold to foreign-going vessels by a whopping 17% to one% from 18%.
Though collection from excise duty for this fiscal (2011-12) is expected to surpass the department's target of Rs.9,200 crore by Rs.300 crore to Rs.9,500 crore, Gowda sought to increase the additional excise duty on Indian made liquor (IML) like beer and low alcoholic beverage by 7.5% to 10% across 17 slabs.
"With effective enforcement, we expect a volume growth of seven% in liquor sales across the state in the new fiscal to achieve a revenue target of Rs.10,775 crore," Gowda informed the lawmakers.
Drinking fruit wine, however, will be much cheaper as the budget proposes to reduce additional excise duty on the brew by a whopping 50% to promote its consumption.
Sparing paddy, rice, wheat, pulses and their products fully from VAT in the next fiscal too, the budget proposes to reduce VAT on dry chillies by three% to two% from five%.
"Similarly, VAT on un-ginned raw cotton will be reduced by three% to two% from five% and on surgical footwear and black boards by nine% to five% from 14%, while braille watches will be fully exempted from VAT," Gowda said amid tapping of the desk by the ruling party's (BJP) legislators.
As part of resource mobilisation, the budget proposes to levy 10% tax on luxuries provided on structures (decorations) in marriage halls, seminar halls, conventional halls and others.
Partnership firms will continue to be exempted from agricultural income tax in the ensuing fiscal too.
Encouraged by higher revenue from stamp duty and registration fee on sale or purchase of land and buildings for residential and commercial purposes in this fiscal, the chief minister has decided to marginally reduce stamp duty to five% from six% on conveyances and sale deeds.