The salient features of the TN State Budget are:
a) Electricity Tax on generating plants using Biomass (excluding bagassee) will be withdrawn to give a boost to green energy producers.
b) Input Tax Credit reversal imposed at the rate of 3 per cent on the inter-state sale of goods as per proviso to section 19(2) (v) of Tamil Nadu Value Added Tax Act 2006, which was introduced with effect from 11.11.2013 will be withdrawn henceforth to make the manufacturing industries in Tamil Nadu more competitive with their counterparts in the neighboring States.
c) Clause (c) under Section 19(5) of TNVAT Act, 2006 will henceforth be withdrawn to enable the dealers to claim Input Tax Credit on the inter-State sale of goods without ‘C’ form. This measure will eliminate additional burden on the dealers effecting inter-State sale of goods without ‘C’ form.
d) Fishing accessories like fishing ropes, fishing floats, fishnet twine, fishing lamps and fishing swivels will be exempted from the present levy of VAT.
e) Mosquito nets of all kinds will be exempted from the present levy of VAT at 5%.
f) Works contract relating to sizing of yarn will be exempted from the present levy of VAT.
g) VAT on cardamom will be reduced from the present levy of 5% to 2%.
h) VAT on LED lamps of all kinds will be reduced from the present levy of 14.5% to 5% to encourage the use of energy saving devices.
i) VAT on air compressors, pump sets up to 10 hp and their parts thereof will be reduced from the present levy of 5% to 5% to encourage MSME Sector and to benefit the agriculturists in the State.
j) VAT on cellular telephones (mobile phones) will be reduced from the present levy of 14.5% to 5%.
Conclusion: When the recent Central Budget is presented expecting GST in the year 2016, the State Budget is silent about the implementation of the GST in the state. .
The withdrawal of the ITC reversal will make the manufacturing industries in Tamilnadu, more competitive certainly.
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