MUMBAI: With state finances in a precarious condition, the state finance department wants to increase Value Added Tax (VAT) to shore up its revenue.
Currently the VAT in the state varies from 2% to 12.5%. State finance minister Sudhir Mungantiwar refused to reveal how much the government proposed to increase and on what kind of goods.
He said the government has to make good the money it is spending on various welfare measures. “We have already sanctioned Rs 2,500 crore for various projects that were not part of the state budget. Around Rs 599 crore was paid to contractors to waive off the road toll, Rs 620 crore paid for crop insurance, Rs 50 crore for the Jalyukta Shivar Yojana to improve the ground water levels and Rs 850 crore for projects of the Rural Development Department. Besides we already have a deficit of Rs 3,500 crore. This will take the deficit further up to Rs 6,000 crore,” he said.
Mungantiwar said the government should have raised VAT in its budget as it would have helped the state to receive an increased remuneration when the Goods and Services Tax system is introduced. “The GST committee will be here in Mumbai on June 25. We shall put forth the proposal before the committee. If it is approved it will benefit the state,” he said.
The finance minister said the government was firm on rolling back the Local Body Tax and will compensate the local municipal corporations by allowing them to collect Professional Tax and Stamp Duty Registration Fees. “In many municipal corporations the revenue from stamp duty registration fees is much higher than what is collected through LBT. It is only the small civic bodies that may face a problem,” he said.
Source: times of india