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Preamble Sections
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THE KERALA FINANCE ACf, 2003 (Act 12 of 2003)
CONITh'TS
1. Short htle and conunencement
2 Amendment of Act I of 1077
3 Amendment of Act 32 of 1976
4 Amendment of Act 15 of 1994 34/2258/04/DTP
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TilE KERALA FINANCE ACf, 2003 •
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(ACT 12 OF 2003)
An Act to gtve effect to certmn financzal proposals of the Government of Kerala for the financza/ year 2003-2004
Preamble -WHEREAS 1t 1s expedient to g1ve effect to certam financ1al proposals of the Government of Kerala for the Fmanc1al Year 2003-2004, BE 1t enacted m the F1fty-fourth Year of the Republic of lnd1a as follows-
1. Short wle and commencement-{ 1) Tius Act may be called the Kerala Fmance Act, 2003.
(2) Sub-sectiOn (4) of sectiOn 2 shall be deemed to have come mto force on the 1st day of Apnl, 1984, sub-sect10n (2) of sect JOn 4 shall be deemed to have come mto force on the l st day of July, 2003 and the remammg proviSions of th1s Act shall be deemed to have come mto force on the lst day of Apnl,
2003.
2 Amendment of Act I of 1077 -In the Abkan Act, 1077 (1 of 1077),- ( l) m secllon 3,-
\a) after clause (2), the followmg clauses shall be msert~d, namely- . '
"(2a) Blendzng -"Blendmg" means the nuxmg of two different spmts of the same or~d1fferent strength,
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(2b) Bonded Warehouse -"Bonded Warehouse" means a warehouse
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where liquor 1s stored m bond,";
(b) after clause (4), the followmg clause shall be mserted, namely·- '
"(5) Compoundzng -"Compoundmg" means the preparatiOn of fore1gn hquor by the add1t10n of flavounng or colounng matter or both, to imported or Ind1an made spmts,";
• Rece1vcd the assent of the Governor on 28th July, 2003 and published as Kcrala Ga7ettc Extraordmary No 1412 dated 29th July, 2003
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(c) m clause 19, after the word "prepared", the word "compounded"
shall b(· msertcd, •
(d) after clause (24), the followmg clause shall be added, namely.--
"1 25) Warehouse -"Warehouse" means that part of a dtsttllery; brewery, wmery or other manufactury where hquor mtcnded for tssue ts kept and mcludes a warehouse established under a <;pectal licence taken out under the Act or Rules.",
(2) m sectiOn 14, m clause {b), after the words "depostted and kept", the words "wtth or" shall be mserted,
(3} for sect ton 17, the followmg section shall be substituted, namely:-
"17 Duty on lzquor or zntoxzcatzng drugs -A duty of exctse or countervathng duty and/or luxury tax shall be levted, tn such manner as may be prcscnbed, on hquors or mtoxtcatmg drugs,-
(a) perrrutted to be imported under section 6; or
(b) manufactured under any licence granted under section 12, or
(c) manufactured at any dtsttllery, brewery, wmery or other manufactury established under section 14
Provtded that no duty or gallonage fee or vend fee or other taxes shal! be I•!Vted under thts Act on rectified spmt mcludmg absolute alcohol, ...,tuch ts not mtended to be used for the manufacture of potable hquor rneant for human consumptiOnb
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Exp/anatzon -No hquor or mtoxtcatmg drug shall be perrrutted to be
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exported unless the duttes, taxes, fees and such other swps as are due to/, ... the Government under thts Act m respect of such hquor or mtoxtcatmg ~ I drug have been patd or a bond for such payment on tts exportatiOn ~ or re-exportatiOn has been executed.", .
(4) m sectton 18,-
(a) for the margmal headmg "How duty may be tmposed", the margma1 headmg "How duty or countervathng duty may be unposed" shall be substttuted,
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(b) in sub-section ( 1 ),- (Q for the opemng words "such duty of excise may be levied", the words "such duty of exctse or countervallmg duty may be leVIed and collected" shall be substituted,
(u) for clause (a), the followmg clause shall be substituted, namely·-
"(a) m the case of spmt or beer, either on the quantity produced m or passed out of a distillery, brewery, ·wmery or other manufactmy licensed or establiShed under section 12 or sectton 14, as the case may be, or m accordance With such scale of equivalents, calculated on the quantity of matenals used or by the degree of attenuation of the wash or wort or on the value of hquor, as the case may be, as the Government may prescnbe;";
(m) for clause (b), the followmg clause shall be substituted, namely.-
"(b) m the case of mtox1cattng drugs, on the quantity produced or manufactured under a hcence granted under section 12 or Issued from a warehouse hcensed or established under sectiOn 12 or section 14,",
(1v) for clause (f), the following clause shall be substituted, namely.-
"(f), m the case of unport of spmts, beer or mtox1catmg drugs, m such manner as may be prescnbed ";
(c) for the ex1stmg sub-sectiOns (2) and (3 ), the followmg sub-secttons shall be substituted, namely:-
"(2) The duty of exc1se or countervathng duty under sub-section (I ) shall be levied and collected at such rates as may be fixed by the Government, from tune to time, by notification m the Gv..ette, not exceedmg the rates specified below:-
Duty of Exc1se
(i) Duty of exctse on hquors (lndtan made)
(u) Duty of excise on mtoxtcatmg drugs
(m) Duty of exctse m form of tax on trees tapped for toddy 34/2258104/DTP
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Max1mum Rates Rs 200 per proof htre or an amount equal to 200 per cent of the value of the hquor whichever IS higher. Rs. 1.50 per gram
Rs 50 per tree per half year or part thereof:
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Prov1ded that the exc1se duty or counterva1lmg duty shall be payable by manufacturer or mtporter of the hquor or mtox1catmg drugs as the case may be. Prov1ded further that such duty or counterva1lmg duty may be pa1d by any subsequent dealer on behalf of the manufacturer or importer, as the case may be Explanatzon -Where any· hqaor IS chargeable w1th duty of exc1se or counterva1lmg duty at a rate dependmg on the value of the hquor, such value shall be the value at wh1ch the Kerala State Beverages (Manufactunng and Marketmg) CorporatiOn L1m1tt:d purchases such hquor from the suppher and m case any such liquor 1s not purchased by the Kerala State Beverages (Manufactunng and Marketmg) Corporation L1m1ted such value shall li>e the value fixed by the Conuruss1oner.
(3) The luxury tax on hquor or mtox1catmg drugs shall be lev1ed and collected,-
(1) m the cases of any hquor m the form of a fee for hcence for the sale of the hquor and m the form of a gallonage fee or vendmg fee or m any one of such forms, and
(u) m the case of an mtox1catmg drug, m the form of a fee for hcence for the sale of the mtoxJcatmg drug
( 4) The luxury tax undet sub-sectiOn (3) shall be Jev1ed at such rates as may be fixed by the Government, from time to time, by notification m the
••• Gazette, not exceedmg the rates spectfied below - • Luxury tax
(a) when lev1ed m the form of a fee for hcence for sale of foretgn hquor (Indian made)
(1) for hcence for sale of foreign hquor m wholesale
(n) for hcence for sale of foreign hquor m hotels or restaurants
(w) for hcence for sale of medtcated wmes
(1v) for hcence for sale of fore1gn hquor m non-propnetory club to nr~lh!rs
Rs 15,000 (Rupees fifteen thousand) for a year or part thereof Rs 12,000 (Rupees twelve thousand) for a year or part thereof Rs 1,000 (Rupees one thousand) for a year or part thereof.
Rs 1 ,500 (Rupees one thousand and five hundred) for a year or part th~reof - }
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(b) When levted 10 the form of gallonage fee
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Rs I 0 (Rupees ten) per bulk htre or Rs 45 46 per bulk gallon. ~ (c) When levied m the form of a fee
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(1) m wholesale
(n) m retatl
(m) m hotels or restaurants (tv) m non-propnetory clubs to Its members
(v) m Seamen's and Manne Officer's club to Its members
(d) When levied 10 the form of gallonage fee
(1) foreign liquor (foreign made) other than beer and wme
(n) for foreign made beer and wme
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Rs 25,00,000 (Rupees Twenty-five lakhs) for a year or part thereof
Rs. I 0,00,000 (Rupees Ten lakhs) for a year or part thereof
Rs. 25,00,000 (Rupees Twenty- five lakhs) for a year or part thereof. Rs I 0,00,000 (Rupees Ten lakhs) for a year or part thereof. Rs. 10,00,000 (Rupees Ten lakhs) for a year or part thereof
Rs 200 (Rupees Two hundred) per bulk htre
Rs 25 (Rupees Twenty-ftve) per bulk htre
Provided that where there IS a difference of duty of excise, countervailing duty or luxury tax as between two licence penods, such difference may be collected m respect of all stocks of foreign hquor or mtoxicahng drugs held by hcencees at the close of the former penod
Explanatzon -The expressiOn "Foreign Liquor" (foreign made) means any hquor produced, manufactured or blended and compounded abroad and Imported mto lndta by land, air or sea ",
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(5) m section 29, for the margmal headmg and sub-sect10n (1), the folloWing shall be substituted, namely .--
"29 Power to make rules.--{ 1) The Govenunent may, by nottficatton m ~ the Gazette, etther prospecttvely or retrospectively, make rules for the purposes of thts Act.".
3. Amendment of Act 32 of 1976.-In the Kerala Tax on Luxunes Act, 1976,--
(1'1 m sectton 4, m sub-section (3), after the words "mto a Government
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Treasury", the words "or a Nattonahsed Bank notified by Government m this -• behalf" shall be added;
(2) m sub-sectiOn (I) of sect10n 9, m clause (c), after the words
"Charter•!d Accountant", the words "or Cost Accountant" shall be mserted.
4. Amendment of Act 15 of 1994 -In the Kerala Tax on Entry of Goods mto Loc.:d Areas Act, 1994,--
(I ) m sectton 2,-
( 1) m clause (d) of sub-sectiOn (I), after the word "use", the word
"consumption" shall be mserted,
(11) for clause (g), the followmg clause shall be substttuted, namely·--
"(g) "rmporter" means a person who bnngs or cause to be brought any goods whether for hrmself or on behalf of his pnncipal or any other person, mto a local area, from any place outstde the State for use, consumptiOn or sales therem or who owns the goods at the trme of entry mto the local area.",
I 2) tn sect10n 3, m sub-sect10n (I), for the second sentence, the folloWing sentence shall be substituted, namely.-- ''The tax on such goods shall be at such rate or rates as may be fiXed by Government by notificatton, on the purchase value of goods not exceedmg the tax payable for the goods as per the Kerala General Sales Tax Act, 1963,";
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(3) m secnon 5, for the words "the Agncultural Income Tax and Sales Tax Department", the words "the Agncultural Income Tax and Commerc1al Taxes Department" shall be substituted,
(4) m section 9A,- ( l) m sub-secnon ( l ),-
(l) after the words "mtercept any motor veh1cle," the words," or motor veh1cle caiT)'lng goods" shall be mserted,
(n) after the words "documents relatmg to the veh1cles", the words
"and the goods" shall be mserted, ,(2) m sub-sectiOn (3), after the words "owner of the veh1cle", the words
"or owner of the goods" shall be mserted,
(3) m sub-sect1on (4) for the words "payable on such motor vehJcle", the words "payable on such II?Otor veh.tcle or goods" shall be substituted; ( 4) for the extstmg provtso to sub-sect1on ( 4 ), the followmg prov1so shall be substituted, namely:-
"Prov1ded that no such order shall be passed unless the owner of the veh1cle or goods or any person duly authonsed by h1m has been afforded a reasonable opportumty ofbemg heard ",
(5) m section 10, for the words, "Government Treasury", wherever they occur, the words "Government Treasury or any Bank notified by Government" shall be substituted,
(6) m sectton l8A, m clause (c) of sub-sectiOn (1), after the words
"a chartered accountant", the words "or a cost accountant" shall be mserted,
(7) after section 19, the followmg sectiOns shall be added, namely·-
"20. Power to amend the Schedule -(I) The Government may, by nonficanon m the Gazette, add, ormt or amend any entry m the Schedule to th1s Act, but not so as to enhance the rate m any case
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(2) Where a not1ficat10n has been 1ssued under sub-section ( 1 ), there shall, unless the not1ficat1on IS m the meantime rescmded, be mtroduced m the Leg1slat1ve Assembly as soon as may be, but tn any case dunng the next sess1on of the Assembly followmg the date of 1ssue of the not1ficat10n a B11l to g1ve eff('ct to the add1tton, orruss1on or amendment of the entnes m the Schedule spec1fied m the notification, and the nottficatton shall cease to have effect when such B1ll becomes law, whether w1th or Without mod1ficat10n, but w1thout preJudice lo the vahd1ty of anythmg previously done thereunder :
Prov1ded that 1f the notificatiOn under sub-sectiOn ( l) IS 1ssued when the Leg1sht1ve Assembly IS m sesswn, such a D11l shall be Introduced tn the Assembly dunng that sess10n.
Prov1oded further that where for any reason a B1ll as aforesaid does not become law wtthm stx months from the date of tts mtroducuon m the Leg1slattve Assembly, the not1ficatton shall cease to have effect on the exp1ratton of the sa1d penod of s1x months
21. ,4 uthorzty -(I) The Comrruss1oner of Comrnerc1al Taxes shall have and exerct>e all the powers and shall perform all the dunes conferred or 1mposed upon 1t by or under th1s Act
(2) the Comrruss10ner shall have supermtendence over all officers and . the perso11s employed m the executiOn of th1s Act
(3) The Comrruss1oner may,-
(a) call for returns from such officers and persons,
(b) make and 1ssue general rules and prescnbe form for regulatmg the practice and proceedmgs of such officers and persons;
(c) 1ssue such orders, mstructtons and d1rect10ns to such officers and persons as 1t may deem fit for the proper adrmmstrat1on of the Act:
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(d) The Corrurussmner shall have power to order refund of entry tax paid, m cases where the goods are proved to be transported for -4 the purpose of replacement.";
(8) in the Schedule,-
(a) for the entry agamst senal number 18, the following entry shall be
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"18. Scanmng Machme mcludmg photo Imaging machme not elsewhere mentioned m the Schedule.",
(b) for the entry against senal number 23, the following entry shall be 1rserted, namely:-
''23 Body bUilt on chass1s of motor vehicles mcluding components, parts, accessones, klts or otherwise.";
(c) for the entry agamst senal number 26, the followmg entry shall be mserted, namely -
"26 Electrlcal goods, mstrllments, apparatus, app!Jances, hotplate, hghtmg bulbs, electncal earthen wrre, porcelam and all other accessories and components parts e1ther as a whole or m part";
(d) after senal number 34, the followmg entnes shall be added, namely·-
"35. Computer paper
36 Caustic Soda
37. Battery other than dry cell and button cell
38 Medical eqUipments, Hospital eqmpments, Surgical eqUJpments (other than consumable or d1sposable) mcludmg Dental chan
39. Readymade garments and hosiery .goods
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Weighmg Machme, Weighmg Bndges, parts and accessones thereof Automatic Teller Machmes •
Automotive LPG
Liqmfied Natural Gas (Compressed Natural Gas).".