Assam govt to lower tax on commodities after protests against VAT hike
Guwahati: Bogged down by protest over the decision of the government increasing VAT on 127 items, Assam finance minister Himanta Biswa Sarma in Guwahati on Thursday announced that his government intends to lower taxes on several commodities in the budget that will be tabled soon.
Informing that his government was contemplating to transfer subsidies directly to consumers, Mr Sarma told reporters, “We are exploring the possibilities to transfer the subsidies, which state government is giving per cylinder to Indian Oil Corporation Limited, directly to consumers. Similar mechanism is being worked out to transfer power subsidy to consumer instead of giving it to power companies.”
Justifying increase of VAT by 1 per cent, Mr Sarma said that state was facing a severe financial crunch with growing figure of liability on the state. “In whitepaper presented recently we estimated that immediate liability of state government was around Rs 10,000 crore however the same is all set to cross Rs 12,000 crore as we are being flooded with unpaid bills of previous congress government. We will present a revised and updated whitepaper in the state assembly,” said Mr Sarma.
Informing that union finance minister, Arun Jaitley will hold a meeting with the officials of the state finance department in New Delhi on Friday, Mr Sarma argued that in those items where VAT has been increased are all MRP administered. “We have taken to dynamic taxation where tax structure can be tweak and we can be adapted to different situation. State government is expecting to mobalise Rs 700 crore from increase in VAT from 5 to 6 percent.”
Indicating that tax on tobacco and liquor may go up in the budget, Mr Sarma said, “Government has constituted a task force with Deputy Commissioners to ensure that that there is no price rise following the increase in the VAT of 127 commodities.”
The finance minister said in 2013 during the congress regime in a year thrice VAT was increased on 2000 items. VAT on these commodities was increased from 12 to 15 percent.
Assuring that state government will have a re-look on VAT increase after March 31, Mr Sarma said “This year is critical for us. We are expecting that payment of underpayment oil royalty from 2014 which amounts to Rs 1450 crore will come to state in next 60 days. The matter of under payment of royalty is pending in the Supreme Court. Both Assam and Centre will file joint petition in the Supreme Court."
Mr Sarma also ruled out the fear that increase in price of diesel and petrol and other commodities will lead to diversion of trade to neighbouring Meghalaya and Nagaland. “We will ensure that there in no diversion of trade,” said Mr Sarma while refusing to roll back VAT hike.
