Gujarat FM increases VAT on tobacco and mobiles in budget

Ahmedabad, Feb 25 (PTI) Gujarat Finance MinisterVajubhai Vala today presented the budget of Rs 80,694 crorefor the 2011-12 financial year, projecting a revenue surplusof Rs 443.44 crore and a fiscal deficit of Rs 14,279 crore.

The budget size has shot up by Rs 11,129 crore ascompared to last year''s Rs 69,565 crore, showing an increaseof 16 per cent.

Vala, in his 17th budget tabled in the state assembly,today proposed to increase the Value Added Tax (VAT) ontobacco and related products, mobile phones and also to levygreen cess on per unit generation of all kinds of electricenergy, including captive energy.

VAT on tobacco products has been increased from 20 percent to 25 per cent while that on mobiles has been increasedfrom 5 per cent to 15 per cent.

The Government will charge two paise per unit ongeneration of all kinds of electrical energy, includingcaptive energy, but excluding solar, wind, bio, geo-thermal,tidal and hydal energy. The amount collected from the ''greencess'' will be used for setting up "Green Energy fund".

"The government experts hope to mop up Rs 524 crore bythe levy of new taxes and green cess," Vala said.

Thrust of the budget were social sector development,urban infrastructure and power sector. .