Sales tax on 37 items hiked

By Our Special Correspondent

HYDERABAD, DEC. 31. The Government has announced a new tax regime involving increase in the sales tax on 37 commodities to bring them on a par with the uniform floor rates throughout the country. Consequently, sales tax is being reduced on 147 items and maintained at existing levels in respect of 88 others.

The State Cabinet decided yesterday to fall in line with the rest of the country and agree on the uniform floor rate with effect from January 1, 2000. An ordinance to give effect to the decision has been sent to the Governor for his approval. The Cabinet continued the meeting today also to discuss the details of the new sales tax structure.

The Chief Minister, Mr. N. Chandrababu Naidu, who briefed the press later, explained that it was also proposed to abolish VAT (value added tax) from April 1, 2001. The need for simplifying the tax structure by reducing the number of levels or slabs had been recognised. The number of slabs had been brought down from 52 in 1995 to 19 and further to six now. The six rates are 0 per cent, 4 per cent, 8 per cent, 12 per cent and special percentage of 1 and 20 in respect of items like bullion and narcotics.

Even while implementing the new floor rates, the Government would 'fight it out' for adopting the zero floor rate for processed salt, sprinkler systems, farm implements and pasteurised milk and lower floor rate of 4 per cent for tractors, power tillers, plastic goods, computers and electronics, Mr. Chandrababu Naidu explained.

Mr. Naidu also said pasteurised milk was one of the 36 items identified for increase of ST to bring them on a par with the new basic rate, but they would urge the Central Government to reconsider the floor rate for pasteurised milk in the light of decisions by various courts which held that pasteurised milk and fresh milk were one and the same.

The Chief Minister said as a result of the new floor rates, the State might net a 'modest' revenue of Rs. 50 to Rs. 70 crores additionally.

The following are the items on which sales tax is being increased: Bullion (present rate 0.50 and new rate 1.00), edible oils (from 2 per cent to 4 per cent), oilseeds (2 to 4), bicycle (2 to 4), chemical fertilizers (3 to 4), agricultural implements (zero to 4), maize products, starch (2 to 4), electronic goods, computers (3.5 to 8), TV, VCR and electronic toys (3.50 to 12), dry fruit (10 to 12), photographic film (4 to 8), motor vehicles except tractors (8 to 12), musical instruments (10 to 12), plastic goods and PVC articles (10 to 12), soaps (10 to 12), poultry feed (0 to 4), branded processed salt (0 to 4), silk and silk fabrics (8 to 12). This apart, chocolate and wheat are being increased by one per cent for the sake of fitment.

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Section  : Regional
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