No new taxes in budget

By Our Special Correspondent

GANDHINAGAR, JULY 26 : In his first budget after the January 26 killer earthquake, the Gujarat Finance Minister, Mr. Vajubhai Vala, has spared the people of the State of any fresh tax burden except re- adjusting rates of sales tax on certain items for uniformity in floor rates, despite making a provision of Rs 7,293.26 crores for the earthquake reconstruction and rehabilitation.

Presenting a Rs 36,102.75 crores budget for the current financial year, Mr. Vala left an uncovered deficit of Rs 292.95 crores after estimating revenue increase by Rs. 110 crores in re- adjustments in the sales tax rates and announcing tax relief to the tune of Rs.39 crores.

The annual budget scheduled to be presented in February was then postponed following the killer earthquake after adopting a vote on account for five months till August. Mr. Vala said the income and relief estimated in the budget for the current year would be for the remaining seven months.

Giving details of the steps being taken to meet the situation arising out of the earthquake, Mr. Vala estimated that the unprecedented disaster would cause an additional burden of Rs 11,000 crores on the state exchequer but said the bulk of the amount would come from the World Bank and the Asian Development Ban loans, as well as the central assistance, the two per cent surcharge on income tax levied by the centre and the permission to the state by the centre to float tax free bonds through the Reserve Bank of India for which a provision of Rs 700 crores had been made in the current year.

Mr Vala proposed a one per cent hike to three per cent in sales tax on diesel to compensate the loss of revenue to the municipalities and panchayats due to abolition of octroi from this year even if these local bodies were not levying octroi earlier. He also proposed hike in sales tax rates from zero to eight per cent on bamboo, except for the small artisans, four to eight per cent on vitaminised milk food, stonewares and loose tea, six to eight per cent on mosaic tiles and four to 12 per cent on jam, pulp, sauce and ketch-up. But he claimed that all these increase had been made in conformity to the floor rates accepted by the finance ministers of all the state to give level- playing ground to all.

Mr Vala proposed a one per cent stamp duty on housing documents at the first sale, which was duty-free at present, but has reduced the stamp duty on documents on transfer of movable property from eight per cent to two per cent and duty on mortgage of property on bank loans from three to two per cent. He has also proposed lifetime tax on heavy motor vehicles at 10 times of the existing annual rates.

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