Presenting the Finance Bill in the Assembly on Monday, Finance Minister Amit Mitra put tobacco products such as cigarettes, gutkha and pan masala under schedule D of VAT, which enables the government to charge taxes more than the present 13.5 per cent.

“This has been done to empower the government to impose taxes on these products, which can cause deadly diseases like cancer. We will announce the quantum of increase soon. However, we have kept bidis, which is consumed by the common people, outside schedule D,’’ Mitra later told the media outside the House.

Mitra also raised tax on India-made foreign liquor by bringing it under schedule D. For alcohol sold at MRP (maximum retail price), VAT has been increased from 23 per cent to 27 per cent. Alcohol sold without MRP will attract a VAT of 50 per cent against the current 37 per cent.

“I have been asked by Chief Minister Mamata Banerjee not to levy tax on the people as they are already burdened with high inflation. The CM herself has gone to markets to check prices,” the Finance Minister said.

Mitra said he had emphasised on three things to increase tax revenue. “Efficiency has been imposed in tax administration, massive simplification has been introduced in the tax regime and a system of rewarding honest businessman is also being introduced,’’ he said.

The government had earlier said it was expecting a 28.2 per cent increase in this year’s tax collection over last year’s revised estimate of Rs 17,024 crore. It also expects to increase excise duty by 33.4 per cent to Rs 2,418 crore.

Commenting on the debt burden of the state, Mitra said while the ceiling on the amount of loan the state could raise from the market was Rs 17, 828 crore, the previous Left Front government had raised Rs 6,000 crore in the first one-and-a-half months. “That leaves us with Rs 11,828 crore. However, in the months of June-July we had to raise Rs 5,000 crore. And every month, we have to pay Rs 1,500 crore as interest,’’ he said.