Gandhinagar, Feb 25 (UNI) To accelerate the process of development, Gujarat Government today proposed to levy additional VAT between one to 2.5 per cent to mobilise financial resources and income of the state which has been estimated at Rs 48983.99 crore, including receipt of Rs 10705.87 crore on capital account in 2008-09.
The fresh levy of additional tax will also be used for partly financing the seven big civic bodies, who are finding difficulties in the wake of abolition of Octroi last November.
Presenting the state Budget for 2008-09 in the state assembly, Finance Minister Vajubhai Vala said the proposal of the new tax will fetch Rs 880 crore to the state.
He said the capital receipts include loans of Rs 900 crore from NSSF, open market borrowing of Rs 7990.31 crore, loan of Rs 1139.83 crore from financial institutions and loan of Rs 424 crore from government of India for externally aided projects.
The Minister said out of the total estimated expenditure of Rs 49455.19 crore, the expenditure on revenue account is Rs 38225.73 crore and expenditure on capital account has been estimated at Rs 11229.46 crore.
This includes Rs 7384.29 crore as interest payment on public debt and Rs 3159.35 crore for repayment of debts.
Provision of Rs 262.59 crore has been made for Gujarat State Disaster Management Authority and Rs 612 crore has been made towards emergency relief and restoration works to deal with any natural calamity.
Mr Vala told the assembly that the additional taxes on most important commodities and medicines are proposed to be one per cent and all other items, where VAT is at the rate of four per cent.
In case of other commodittes, the additional tax will be 2.5 per cent.
While moving the proposal, he said the state has decided to give priority to the development of Human Resources and infrastructure for the balanced economic and social growth.
He said to achieve the target of more than one lakh crore for 11th five year plan, the state government has fixed the annual plan for 2008-09 at Rs 19,030 crore.
The additional tax will not apply to petrol, diesel, declared goods and exempted goods, the Finance Minister said.
The government has also allowed civic bodies to levy, collect and retain professional tax. At present, these bodies were collecting professional tax on behalf of the state government, which was given to civic bodies as collection charge.
The new measure will enhance the civic bodies income by Rs 120 crores. He said a bill, amending the Gujarat State Tax on Professions trades, calling and employment act 1976, will be presented to the state assembly during the current session.
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