Gujarat State may soon lower
sales tax on chemicals
Bolstered by its successful
move of increasing revenue by lowering sales tax, the Gujarat government
is now actively thinking of easing the burden of sales tax on chemicals
and plastics on the lines of tea.
An indication to this effect
was given by state finance and revenue minister, Mr Vajubhai Vala at an
open house on sales tax organised by the Southern Gujarat Chamber of Commerce
and Industry (SGCCI) and the Surat sales tax commissionerate. The open
house was organised to bring about a solution to the different sales tax
problem being faced by the trade and industry of the south Gujarat region.
According to Mr Vala, a move
had been set afoot to provide sales tax relief on chemicals and plastics
in the current year itself and this was to be included in the 1997-98
state budget. However, this could not be done due to the devastating cyclone
in Kandla and other coastal areas of Saurashtra. Mr Vala hinted that the
state government may think of this in the 1999-2000 budget.
The government had slashed
sales tax on tea from a hefty 12 per cent to a moderate four per cent.
With this, the government’s revenue had increased. The guiding spirit
at the state capital of Gandhinagar was to lower down and rationalise
the sales tax rate as much as possible so that trade and industry, instead
of resorting to evasion, come forward and pay the applicable sales tax,
he said. "Instead of focussing on increasing the revenue per head we are
interested in increasing the honesty per head". The government is committed
to bring down and rationalise the tax structure and along with this, trade
and industry should also show its commitment to pay up the taxes.
The Gujarat finance minister
also came out openly for a uniform sales tax structure in all the states
across the country. This would also check the present trend of sales tax
evasion by bogus billing and dragging of trade from one state to another.
In this context, he also made a strong plea for withdrawal of all subsidies
and relief's in taxation being granted to units located in Union territories
as Gujarat with two Union territories located in close proximity in the
south — Dadra Nagar Haveli and Daman — had to pay a heavy price.
Similarly, the state governments,
in order to attract big industrial units, accord a pioneer unit status
to such units under which, sales tax relief's are provided. The Central
government in turn should allot a good amount to the states from the income
it generates from the excise duty, customs duty and the income tax collected
from such units. State law and justice minister, Mr Hemant Chapatwala,
while lauding the role played by the sales tax department in generating
revenue for the state government said as against a target of Rs 4,400
crore fixed for the sales tax department in the ongoing financial year,
the government is all set to generate an income of Rs 5,100 crore, about
Rs 700 crore more than the target. SGCCI president, Mr Rajendra Chokhawala
made a plea for exemption of sales tax on all vital instruments and gadgets
used by social and voluntary organisations in the medical and other social
sectors.
A total of 139 different
problems were presented before Mr Vala pertaining to sales tax. While
some of the problems were solved on the spot, others requiring policy
level changes will be addressed at a meeting to be held Gandhinagar next
month. Some of the problems will also be taken up at the interstate sales
tax committee headed by West Bengal chief minister, Mr Jyoti Basu in which
the Gujarat chief minister, Mr Keshubhai Patel is also a member.
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