In what could be a respite to diabetics and consumers, the AIADMK government has in its second budget after storming to power announced total value added tax (VAT) exemption for insulin, wheat, oats, helmets, hand-made locks, feeding bottles and nipples and helmets.
Also, it extended concession to other products, making them cheaper. The 14.5 per cent VAT for electrically operated two-wheelers (e-bikes), compact fluorescent lamps, compact fluorescent tubes, splints and veneers, sanitary napkins and diapers, has been reduced to five per cent.
“The slowdown of economy has affected our revenue flow. Despite this, based on the suggestions made in the pre-budget discussions with the trade and industry associations and also based on various representations, we propose to give tax concessions,” finance minister O. Panneereselvam said while presenting the budget for 2012-13.
Further, with a view to mobilise additional resource of Rs 1, 500 crore for various welfare measures, the state government would levy a tax of 14.5 per cent on alcohol and withdraw VAT exemption granted on vegetable oil for turnover up to Rs 5 crore per year to prevent tax exemption. VAT would be levied at five per cent on such sale of vegetable oil.
Also, tax rates on tourist taxis, maxi cabs, private service vehicles, spare stage carriers, construction equipment vehicles and other state contract carriers would be rationalised and charges would be doubled for advance blocking of fancy numbers.
Two-wheelers, would, however, be exempted from these charges.