Karnataka Budget: State to impose cess on commercial transport vehicles, multi-storied buildings & online deliveries

A 1% fire cess will be imposed on newly constructed multi-storied buildings, Karnataka CM Siddaramaiah said while announcing the Budget

The registration of new commercial transport vehicles and property tax for multi-storied buildings in Karnataka is set to become more expensive.

A 1% fire cess will be imposed on newly constructed multi-storied buildings, Karnataka CM Siddaramaiah while presenting the 2024-2025 state budget said.

"To enhance efficiency in the Fire and Emergency Department, a 1% fire cess will be levied on the property tax of newly constructed multi-storied buildings, in accordance with the Karnataka Fire Force Act, 1964." said Siddaramaiah.

A cess will also be imposed on the registration of commercial transport vehicles. Siddaramaiah said, "Security and welfare programme will be devised through the Karnataka State Unorganised Workers Social Security Board for workers of transport vehicles by imposing a cess on the registration of commercial transport vehicles."

He added, "Additionally, measures will be taken to provide necessary basic facilities for vehicle drivers at stations/highways."

Also, read: Karnataka labour minister proposes 5% cess on vehicles to support informal and gig workers

Online deliveries are also expected to become more expensive. Siddaramaiah said, "The Platform-based Gig Workers Fund and Welfare Fee Bill will be introduced to provide livelihood security to Platform-Based Gig Workers. Through this Act, a cess will be levied on 'eligible online transactions', and the funds collected will be utilised for the welfare of gig workers."

Also, read: Only 3,000 gig workers have registered for insurance scheme so far: Karnataka labour department

After Rajasthan, Karnataka will soon come up with the Gig and Platform Workers' Bill to safeguard the interests of gig workers. “According to the Social Security Code of 2020, a 1-2 per cent cess is to be levied on the annual turnover of the aggregator. We are also considering a cess on the number of deliveries done through aggregator platforms. But nothing has been finalised so far,” Additional labour commissioner (industrial relations) Manjunath Gangadhara had told Moneycontrol.

“In Rajasthan, they are levying 1% of the total value of the service or delivery (such as a taxi ride or a food order). But aggregators said there are some flaws in the Bill. While Rajasthan passed the Bill it is yet to frame the rules. We are trying to come up with a better Bill,” said Gangadhara.

Tax slabs for Indian Made Liquor (IML) and beer will be revised. "In order to rationalise the tax slabs and make them competitive with neighboring states, the tax slabs for IML and beer will be revised," he said.

Also, read: Karnataka Budget: Tax slabs for Indian Made Liquor and beer will be revised, says CM Siddaramaiah

The CM said that the Housing department will undertake various measures to mobilise resources for providing affordable housing in urban areas. "The Karnataka Affordable Housing Fund (KAHF) will be established by mobilising resources through asset monetisation, housing cess, and various statutory fees, revising the slum cess under the Karnataka Town and Country Planning Act, and monetising the assets belonging to the Karnataka Slum Development Board."

"Starting this year, an additional non-tax revenue of Rs 2,000 crore will be mobilised through a revised advertisement policy and premium FAR Policy," he added.

The guidance value for immovable property was revised by the government in 2023-24. In the current financial year, up to January, Rs 15,692 crore revenue has been collected, a growth of 10 percent.

"Our government revised the tax levied on various vehicle categories by amending the Karnataka Motor Vehicle Tax Act. In the current financial year, up to January, Rs 9,333 crore revenue has been collected, achieving a growth of 19 percent over the corresponding period of the previous financial year," he said.

Also, read: Karnataka budget: Bengaluru Metro to extend to Tumakuru and Devanahalli; tunnel road in Hebbal announced