Thaindian News

Shimla, March 31 (IANS) The Himachal Pradesh government Wednesday hiked value-added tax (VAT) on certain goods by one percent in its budget for 2010-11 that was passed in the state assembly Wednesday.
The budget, amounting to Rs.15,078.92 crore, presented on March 12 by Chief Minister Prem Kumar Dhumal, who also holds the finance portfolio, was passed by voice vote after days of marathon discussions.

Replying to the budget discussions, Dhumal justified hike of one percent value-added tax (VAT) on certain goods, saying the government needed financial resources to cope with its deficits.

A senior government functionary said: “The increase of one percent VAT would bring in an additional income of Rs.50 crore.”

Jewellery, utensils, fabrics, beedi, and soaps brought from other states would be costlier.

There is, however, no fresh tax on goods of common use and luxury items.

To provide relief to the common man from galloping food inflation, the government also announced that the subsidy schemes for three varieties of pulses, two edible oils and salt distributed through the public distribution system would continue.

To boost state revenue, the government Tuesday introduced a bill to levy entry tax on goods brought from outside into the state.

The government is hoping to generate around Rs.25 crore annually from the new tax, an official said.

The bill proposes seven percent tax on diesel, furnace oil and lubricants, and five percent on cement and other goods used in construction of hydropower, electricity transmission and telecommunications projects.

It also proposes to levy four percent tax on iron, steel, pan masala, and cigars and cigarettes.

However, the bill exempts agriculture implements, agricultural or horticultural produces and aids for the handicapped.