The Hindu Business Line : Bengal to mop up Rs 150 cr thru tax, non-tax measures

At a glance
DA for State Government employees, teachers and others concerned with effect from April 1 Pensioners will get corresponding DA allowance relief.
Deoiled rice bran fully exempted from VAT
Tax on mats made of plastics cut from 12.5 per cent to 4 per cent

Kolkata March 16 Presenting the State Budget for 2007-08 in the Assembly on Friday, with the main Opposition Trinamool Congress and Congress members conspicuous by their absence, the Finance Minister, Dr Asim Dasgupta, has proposed to mop up Rs 150 crore through tax and non-tax measures.

He has proposed levy of VAT at the rate of 12.5 per cent on tobacco and tobacco products (Rs 50 crore mop-up), MRP revision flexibility on country spirit (Rs 30 crore), strict enforcement of MV Act rules on overloaded vehicles plying state highways (Rs 50 crore) and additional levy of one per cent stamp duty on high value flats (Rs 20 crore).

If the proposals of plan and non-plan expenditure for the current year are taken together, the total expenditure is placed at Rs 46,438.45 crore while total receipts are at Rs 46,285.45 crore, leaving an initial deficit of Rs 153 crore for the next financial year. Matched against this, Dr Dasgupta has left an uncovered deficit of Rs 3 crore.

Special emphasis

The proposals have laid special emphasis on simplification of rules and procedures, rationalisation of tax rates and making the system of collection transparent and easy in order to ensure better compliance and also promote growth in agriculture, industry and trade.

The Minister, reiterating the Government's known stance on SEZs, clarified that "until a socially balanced decision is taken at the national level, the State Government will not take any initiative in the matter".

He said in the case of large industries where a large area of land is required because of special characteristics of the industry, it will be necessary to take steps in consultation with local people with necessary balance being maintained with agriculture and payment of appropriate compensation for acquisition of land.

tea reliefs

The Finance Minister has proposed further tax reliefs for revival of the tea industry in the state. The State Government will arrange credit on soft terms if the workers of a closed industry or a closed tea garden come forward for reopening of the industry or garden, as the case may be. Depending on circumstances, the Government will also grant additional relief to facilitate reopening of such units.

The current financial assistance of Rs 500 per head per month to workers of factories and tea gardens lying closed for more than a year will be raised to Rs 750 per head per month from next year. He said the scheme of insurance and training will be introduced for these workers, for which the entire expenditure will be borne by the State Government.

Tea estates have been exempted from payment of education cess and rural employment cess for a further period of two years from April 1, subject to their fulfilling the conditions for such relief within the extended period.

Dr Dasgupta also announced another instalment of DA for State Government employees, teachers and others concerned with effect from April 1. Pensioners will get corresponding DA allowance relief.

VAT registration

He said the number of registered dealers under West Bengal Value Added Tax Act 2003 has increased from 1,17,551 during 2004-05 to 1,79,809 as at end-February 2007. Further simplification of VAT return forms has also been proposed.

VAT return form

Dr Dasgupta said the Empowered Committee of State Finance Ministers on Tax Reforms has constituted a committee of commissioners of commercial taxes to suggest a simplified VAT return form which can be adopted in all the states with some flexibility to factor in local characteristics. The panel will submit its recommendations shortly and a further simplification of the return form would be carried out in the next financial year.

Deoiled rice bran has been fully exempted from VAT while tax on mats made of plastics has been reduced from 12.5 per cent to 4 per cent. VAT on footwear made out of EVA (ethylene vinyl acetate) has been reduced to 4 per cent to be on par with that on plastic footwear. Tax on stone chips has been cut to 4 per cent.

Keeping the current stamp duty rates intact, the Finance Minister has proposed an additional stamp duty at the rate of 1 per cent of market value on deeds of conveyance relating to transfer of a high value flat or house, the market value of which exceeds Rs 25 lakh. This measure is expected to yield an additional revenue of Rs 20 crore. According to Dr Dasgupta, common people will not be affected by this fresh levy.

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