Sales Tax On Petrogoods Hiked In Punjab Budget

The Punjab budget for 1997-98 proposes a hike in sales tax on petrol, mobil oil, lubricants and certain electrical goods, besides stamp duty and road tax on commercial vehicles. No fresh taxes have been proposed in the Rs 352.52 crore deficit budget presented by state finance minister Kanwaljit Singh in the state Assembly yesterday.

The proposal to raise sales tax on petrol, mobil oil, lubricants, washing machines, vacuum cleaners, generators and transformers to 12 per cent is aimed at mopping up Rs 240 crore, Singh said. The state government also expects to generate Rs 40 crore through sale of rural evacuee land.

 

The Centres decision to waive a special term loan of more than Rs 800 crore spent in combating terrorism in the state would also help cover the budget deficit, he added.

The minister said that steps would be initiated to enhance collections through better tax administration; curtail avoidable government expenditure, both in the government departments and the PSUs; identify and dispose of or commercially use vacant government land; enhance non-tax receipts through revised rates and to either revise the rates of existing taxes or to impose new taxes but only when it is a must.

He said the power and agriculture sectors together accounted for 46 per cent of the total budgetary money, demonstrating the governments commitment to generate more power to attract industry and make agriculture a viable proposition.

A reduction in sales tax on paper from 8 per cent to 2 per cent and the inter-state sales tax payable on fuel efficient light commercial vehicles (LCVs) of engine of 3200-3500 cc capacity from 4 per cent to 0.5 per cent has been proposed in the budget, he said.

The budget also proposes two per cent sales tax at source on the sale of goods supplied in the execution of works contract.

Singh announced a proposal to set up a Social Reconstruction Fund in the state finance department with a corpus of Rs 50 crore. The fund would be used for the welfare of the needy in the state including those affected by violence in the state.

Singh said his government inherited a deficit of Rs 602.7 crore from the previous Congress government with a total debt burden of Rs 11,816.52 crore, including central loans of Rs 9,952.71 crore. Out of the planned outlay of Rs 2,100 crore, the power sector gets top priority with Rs 795.16 crore, followed by social services (Rs 638.9 crore), irrigation and flood control (Rs 231.96 crore), rural development (Rs 109.08 crore), agriculture (Rs 74.12 crore), transport (Rs 65.17 crore) and industry (Rs 51.49 crore), Singh said.

Singh said the hike in sales tax was proposed to bring it at par with the neighbouring states. Chief Minister Prakash Singh Badal had taken up the issue of outflow of 60 per cent of bank deposits from Punjab with the Reserve Bank of India (RBI), leading bankers and the central government. We want that the entire money should be spent in Punjab, he said.

Singh said the planned outlay of Rs 2,100 crore would be further supplemented by development expenditure of Rs 6,936.90 crore, which is higher than the approved outlay of Rs 6,570 crore of the entire eighth five year plan.

The breakup of the development expenditure is as follows: rural development fund (Rs 150 crore), agricultural marketing board and market committees (Rs 98 crore), central share of centrally sponsored schemes (Rs 493.31crore), institutional finance to be raised by PSUs and cooperatives (Rs 5,906.84 crore) and expenditure to be incurred by municipal corporations, committees and civic bodies (Rs 288.75 crore).

Plans are to set up 3,050 new small, medium and large industrial units with a capital investment of Rs 900 crore during 1997-98 to generate employment for 33,500 people. The export target for the year has been fixed at Rs 3200 crore.

Singh described his budget as innovative, growth-oriented and restorer of financial discipline, and justified increase in sales tax, road tax and stamp duty as rationalisation of the tax structure to mop up additional resources.