Rangasamy announces VAT relief in budget

With Lok Sabha elections about a year away, the AINRC Government in Puducherry led by N Rangasamy today slashed value added tax on various items including cooked food, mineral water, wet grinders, edible oil and exempted fertiliser and low-cost footwear from the tax net.
Even as it faces financial crunch, the state government announced tax relief that would benefit almost all sections--from farmer, middle class to the industry.
Presenting the Rs 5,890 crore budget for 2013-14, Rangasamy, who also holds the finance portfolio, said the VAT relief was aimed at revitalising tourism and improving trade and commerce in the union territory.

Of the Rs 5,890 crore, Rs 2,000 crore would be under Plan, Rs 3,750 crore non-plan and Rs 140 crore for centrally sponsored schemes and other programmes.
He said revenue and capital receipts are estimated at Rs 5,013 crore and Rs 877 crore respectively as against the expenditure of Rs 4,965 crore and Rs 925 crore respectively in the current fiscal, leaving a fiscal deficit of three per cent of gross state domestic product (GSDP).
The budget presentation was marked by walkout by opposition Congress and AIADMK and boycott by DMK, which accused the Rangasamy Government of failure on 'various counts'.

Rangasamy said VAT on all kinds of cooked food including sweets and savouries and mineral water had been proposed to be reduced from ten percent to two per cent, meeting the demand from hoteliers.

He said VAT on two-wheelers would be reduced from 10 to 8 per cent besides wet grinders and generators to 5 per cent from 10 per cent.
Fertilisers, pesticides and insecticides, footwear (costing less than Rs 200) and building materials sold by the cooperative building centres would be exempted from VAT.
Under Excise, Rangasamy said wine had been delinked from Indian Made Foreign Liquor(IMFL)and the excise duty of Rs 10 per bulk litre and additional excise duty ranging between Rs 34 and Rs 99 per bulk litre had been proposed in the budget.

He also announced rationalisation of excise duty on IMFL.
Puducherry's outstanding debt as on March 31, 2013 stood at Rs 5,006 crore and is expected to be around Rs 5,609 crore this year.
Stating that Puducherry did not receive any share of central taxes in view of its union territory status, Rangasamy said he had requested the Centre for loans with lower interest so that the state's debt servicing could be reduced considerably.