Besides, unmanufactured tobacco, biri and tobacco used in
manufacture of biri which were earlier exempted from VAT will come under tax net
as the state has decided to levy 10 per cent tax on such items. “The move to
raise VAT on tobacco products has been necessitated by similar tax hikes already
introduced by neighbouring states and also factoring in increasing health risk
posed by tobacco consumption. This enhanced tax rate will be applicable with
immediate effect and a notification will be issued on Thursday by the state
government,” state minister for finance and public enterprises, Prafulla Chandra
Ghadai told newspersons here.
Apart from raising VAT on tobacco products, the state finance
department has also decided to lift input tax credit on coal used by thermal
power plants. Following lifting of credit, the department hopes to gain Rs 50
crore per year. It has also been decided to raise VAT rate of cellular handsets
costing Rs 5,000 and beyond from four per cent to 13.5 per cent.
The items on which the state finance department has decided to ease VAT rates
include excavators, bulldozers, back loaders, glass sheets, plywood, laminated
sheet, particle board and structural steel. These products would now be levied
VAT at the rate of four per cent from 13.5 per cent. It may be noted that the
Hota committee, an expert committee formed by the state government to suggest
revenue enhancement measures, had recommended hike in base VAT rate in the state
from four per cent to five per cent.
Business Standard, India, dated