Rs 142.7 Cr Deficit In Gujarat Budget

The Gujarat budget, which was presented in the assembly by state finance minister Babubhai Meghji Shah yesterday, showed a deficit of Rs 142.77 crore.

The estimated budget deficit for 1997-98 stood at Rs 72.27 crore. However, an additional revenue of Rs 170 crore through proposed increases in sales tax, stamp duty and motor vehicle and goods taxes is offset by a drain of Rs 240.5 crore by way of reliefs under the Sales Tax Act and in entertainment tax.

Tax relief has been announced on items like pressure cookers, water pumps, air conditioners and electric motors.

The finance minister has done away with the provisions of the turnover tax by proposing to merge it, wherever necessary, with the rates of sales tax.

 

While pressure cookers attract a sales tax of one per cent and their spares and accessories 10 per cent, the minister proposes to bring them under one head at two per cent, besides the exemption from turnover tax.

Similarly in water pumps and sets, the 5 per cent sales tax ,which was later reduced by a notification to 2 per cent, and the 5 per cent tax on spares and accessories, will be brought under a unified rate of 4 per cent.

Sales tax on air-conditioners and plants, will be reduced from 17 and 18 per cent, respectively, to 15 per cent.

Electric motors in domestic appliances will be removed from the prohibited goods list.

Tax on drugs will be brought down from between 4 and 7 per cent to 6 per cent. Life-saving drugs will continue to be exempted from tax. Purified and mineral water sold in sealed bottles will be liable to 12 per cent sales tax.

Sales tax on paanmasala has been doubled, from 10 to 20 per cent. The 14 per cent tax on religious idols and allied articles has been altogether removed. Tax on dry fruits has been halved from 12 to 6 per cent.

While luxury items like carpets and cameras got a three per cent concession, from 18 to 15 per cent, tax on jewellery has been slashed by a third, from 12 to 4 per cent.

The minister proposes to raise the profession tax exemption limit from Rs 1,000 to Rs 3,000 a month, while those with salaries between Rs 3,000 and Rs 6,000, the present rate of Rs 20 a month will continue. In the Rs 6,000 to Rs 9,000 bracket, the rate has been doubled from Rs 20 to Rs 40, trebled to Rs 60 on salaries of Rs 9000 to 12,000 and quardrupled to Rs 80 on those above Rs 12,000.

Though there will be now new tax on two-wheelers, it has been increased across the board on cars and jeeps bought for personal use at rates ranging from Rs 1,500 to Rs 5,000, according to weight categories.

The stamp duty of 8 per cent on documents relating to merger and amalgamation of companies will be fixed at 2 per cent, based on valuation of shares. The government proposes to constitute a valuation board for the purpose.

The 6 to 8 per cent stamp duty on lease documents of movable properties will be reduced to 2 per cent to promote lease transactions.

There will also be a fixed stamp duty of Rs 100 for every Rs 1 lakh given against hypothecation of pledge, which at present attract no duty, but instruments of loan below Rs 5 lakh, as well as, those to farmers and educated unemployed under any state or Central scheme will be exempt from such duty.

Conveyance deeds of houses constructed by the Gujarat Housing Board or other government agencies will bear a token stamp duty of 1 per cent, if they are valued at less than Rs 75,000, whereas at present, the duty is 6 to 8 per cent.

The minister has proposed imposing sales tax on lease of motor vehicles and office equipment at the rate of 2 per cent, but allowed full set-off tax paid earlier to repurchase plant, machinery, vehicles and other goods.

The minimum 2 per cent sales tax on work contracts will be replaced by tax deduction at source at the same rate at the time of payment for such contracts, but a dealer in them will get full set off of tax paid.

Full exemption from entertainment tax is proposed to be granted on dish antennae and cable TV in rural areas, a favour enjoyed only by Gujarati movies at present.

The government will announce an amnesty scheme for recovery of dues in government royalty and cess to provide relief in interest or penalty. An earlier scheme relating to sales tax will be reviewed to give dealers a last opportunity by allotting various time slots and interest or penalty rates according to the age of the default. For instance, in respect of arrears prior to April, 1985, there would be no amnesty in interest or penalty.