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EXTRACT OF THE KERALA FINANCE BILL, 2010

BILL

to give effect to certain financial proposals of the Government of Kerala for the Financial Year 2010-2011.

Preamble.- WHEREAS, it is expedient to give effect to certain financial proposals of

the Government of Kerala for the Financial Year 2010 2011;

BE it enacted in the Sixty-first Year of the Republic of India as follows:-

1. Short title and commencement.-

(1) This Act may be called the Kerala Finance Act , 2010.

(2) It shall come into force on the 1st day of April, 2010.

2. Amendment of Act 11 of 1957.- In the Kerala Surcharge on Taxes Act, 1957 (11 of 1957),-

(1) in section 3A,-

(i) in sub-section (3), for the figures, words and symbols "30th September, 2008 or on such date as may be notified by the Government." the figures, words and symbols

"30th June, 2010." shall be substituted;

(ii) for sub-section (4), the following sub-section shall be substituted, namely:-

"(4) On receipt of an application under sub-section (3), the assessing authority shall verify the same and intimate the amount due to the assessee and there upon the assessee shall remit the amount in lumpsum or in three equal instalments, on or before 30th June, 2010:

Provided that notwithstanding anything contained in this section, where,

(a) after the last date for filing option, the Government have notified a further date under sub-section (3); and

(b) if an applicant had filed his option earlier and remitted at least one instalment, but had failed to remit the balance amount due and his earlier option was revoked by the assessing authority,

on furnishing of a fresh option, the amount paid under the earlier option shall be treated as the amount paid under the subsequent option."

(2) in section 3B,-

(i) in sub-section (2), for the figures, words and symbols "30th September, 2009 or on such date as may be notified by the Government." the figures, words and symbols "30th June, 2010." shall be substituted;

(ii) for sub-section (3), the following sub-section shall be substituted, namely:-

"(3) On receipt of an application under sub-section (2), the assessing authority shall verify the same and intimate the amount due to the assessee and thereupon the assessee shall remit the amount in lumpsum or in three equal instalments on or before 30th June, 2010;

Provided that notwithstanding anything contained in this section, where,

(a) after the last date for filing option, the Government have notified a further date under sub-section (3); and

(b) if an applicant had filed his option earlier and remitted at least one instalment, but had failed to remit the balance amount due and his earlier option was revoked by the assessing authority,

on furnishing of a fresh option, the amount paid under the earlier option shall be treated as the amount paid under the subsequent option."

4. Amendment of Act 15 of 1963.- In the Kerala General Sales Tax Act, 1963 (15 of 1963),-

(1) for section 7, the following section shall be substituted, namely:-

"7 Payment of tax at compounded rates.-

Notwithstanding anything contained in sub-section (2) of section 5, any bar attached hotel, not being a star hotel of and above four star hotel, heritage hotel or club, may, at its option, instead of paying turnover tax on foreign liquor in accordance with the said sub-section, pay turnover tax on the turnover of foreign liquor calculated at the rates in clauses (a) or (b) of items (i) and (ii), respectively, whichever is higher,-

(i) in respect of a bar attached hotel of and below two star,

(a) at one hundred and forty per cent of the purchase value of such liquor, in the case of those situated within the area of a municipal corporation or a municipal council or a cantonment, and at one hundred and thirty five percent of the purchase value of such liquor, in the case of those situated in any other place; or

(b) at one hundred and fifteen per cent of the highest turnover tax payable by it as conceded in the return or accounts or the turnover tax paid for any of the previous consecutive three years; and

(ii) in respect of a bar attached hotel of three stars,

(a) at one hundred and eighty percent of the purchase value of such liquor, in the case of those situated within the area of a municipal corporation or a municipal council or a cantonment, and at one hundred and seventy percent of the purchase value of such liquor, in the case of those situated in any other place; or

(b) at one hundred and twenty five per cent of the highest turnover tax payable by it as conceded in the return or accounts or the turnover tax paid for any of the previous consecutive three years."

(2) in section 17,-

(i) in sub-section (6), for the fourth proviso, the following proviso shall be substituted, namely:-

"Provided also that the assessment relating to the years upto and including the year 2004-05 pending as on 31st March, 2010 shall be completed on or before the 31st day of March, 2011."

(ii) in sub-section (8),-

(a) for the first proviso, the following proviso shall be substituted, namely:-

"Provided that all such assessments or reassessments pending as on 31st March, 2010 shall be completed on or before 31st March, 2011."

(b) for the third proviso, the following proviso shall be substituted, namely:-

"Provided also that all such modified assessments or modified reassessments or remanded assessments pending as on 31st March, 2010 shall be completed on or before 31st March, 2011."

(3) in section 23B,-

(i) in sub-section (3), for the figures, words and symbols "30th September, 2008 or on such date as may be notified by the Government." the figures, words and symbols "30th June, 2010." shall be substituted;

(ii) for sub-section (4), the following sub-section shall be substituted, namely:-

"(4) On receipt of an application under sub-section (3), the assessing authority shall verify the same and intimate the amount due to the assessee and thereupon the assessee shall remit the amount in lumpsum or in three equal instalments on or before 30th June, 2010:

Provided that notwithstanding anything contained in this section, where,

(a) after the last date for filing option, the Government have notified a further date under sub-section (3); and

(b) if an applicant had filed his option earlier and remitted at least one instalment, but had failed to remit the balance amount due and his earlier option was revoked by the assessing authority,

on furnishing of a fresh option, the amount paid under the earlier option shall be treated as the amount paid under the subsequent option."

(4) in section 23BA,-

(ii) for sub-section (3), the following sub-section shall be substituted, namely:-

Provided that notwithstanding anything contained in this section, where,

(a) after the last date for filing option, the Government have notified a further date under sub-section (3); and

(b) if an applicant had filed his option earlier and remitted at least one instalment, but had failed to remit the balance amount due and his earlier option was revoked by the assessing authority,

on furnishing of a fresh option, the amount paid under the earlier option shall be treated as the amount paid under the subsequent option."

(5) in the SCHEDULE, in serial number 2. Foreign Liquor,-

(i) in item (i) Beer and wine, for the figure "60" under the heading rate of tax (per cent), the figure "50" shall be substituted;

(ii) in item (ii) Other than Beer and wine, for the figure "90" under the heading rate of tax (per cent), the figure "100" shall be substituted.

DECLARATION UNDER THE KERALA PROVISIONAL COLLECTION OF REVENUES ACT, 1985 (10 OF 1985)

It is hereby declared that it is expedient in the public interest that all the provisions of this Bill shall have effect from the 1st day of April, 2010 under the Kerala Provisional Collection of Revenues Act, 1985 (10 of 1985).

STATEMENT OF OBJECTS AND REASONS

The Bill seeks to amend the following enactments to give effect to the financial proposals of Government of Kerala for the financial year 2010-2011 as announced in paras 189, 190, 193, 195 to 200, 202 to 208, 210 to 216, 218 to 229, 231, 232, 234 to 237, 239 to 242 and 247 in the Budget Speech 2010 - 2011, namely:-

1. The Kerala Surcharge on Taxes Act, 1957 (11 of 1957).

2. The Kerala Stamp Act, 1959 (17 of 1959).

3. The Kerala General Sales Tax Act, 1963 (15 of 1963).

4. The Kerala Motor Vehicles Taxation Act, 1976 (19 of 1976).

5. The Kerala Tax on Luxuries Act, 1976 (32 of 1976).

6. The Kerala Agricultural Income Tax Act, 1991 (15 of 1991).

7. The Kerala Value Added Tax Act, 2003 (30 of 2004).

FINANCIAL MEMORANDUM

The Bill, if enacted and brought into operation, would not involve any additional expenditure from the consolidated Fund of the State.

MEMORANDUM REGARDING DELEGATED LEGISLATION

Sub-clause (3) (i) of clause 8 of the Bill proposes to amend section 6 of the Kerala Value Added Tax Act, 2003, which seeks to empower the Government to prescribe such conditions and restrictions in respect of the issue of authorisation by the concerned officers for producing the same for tax reduction in sale to defence personnel, ex-service men etc.

2. Sub-clause (12) of clause 8 of the Bill proposes to insert section 55 of the Kerala Value Added Tax Act, 2003, which seeks to empower the Government to prescribe the form and manner in which the appeal against the order of the Commercial Tax Officers has to be filed and also to prescribe the form and manner in which the appellant has to furnish sufficient security regarding payment of tax in accordance with the order on which the appeal is preferred.

3. Sub-clause (16) of clause 8 of the Bill proposes to amend section 60 of the Kerala Value Added Tax Act, 2003, which seeks to empower the Government to prescribe the manner in which the appeal against the order of the Deputy Commissioner (Appeals) or Assistant Commissioner (Appeals) has to be filed and also to prescribe the manner in which the memorandum of cross objection filed in this behalf has to be verified.

The matters in respect of which rules are to be made are either administrative in nature or matters of detail. Further, the rules, after they are made, will be subject to the scrutiny of the Legislative Assembly. The delegation of legislative power is, thus, of a normal character.

Dr. T. M. THOMAS ISSAC.