Himachal Pradesh says no increase in VAT on essential and common man items
Thursday, July 15, 2010
Himachal Pradesh says no increase in VAT on essential and common man items

Shimla: A spokesman of the Government said here today that the State Government has not increased the VAT on essential items such as Atta, Rice, Maida, Suji, Edible oil and Vegetable Ghee inspite of approval from Empowered Committee of Finance Ministers of the States in larger interest of the common man. The proposed increase covers only luxury items, he added.

The Spokesman said that the decision to increase rate of VAT has been taken because 16 States being ruled by different political parties including Congress had already increased the standard rate of VAT ranging from 12.50 percent to 15 percent. Andhra Pradesh has increased it to 14.5 percent, Rajasthan 14 percent, Jammu and Kashmir 13.5 percent, Assam 13.5 percent, Uttar Pradesh 14 percent. In Rajasthan and Jammu and Kashmir besides VAT these States have levied Entry Tax on large number of items. The neighbouring States of Punjab and Uttarakhand had increased the VAT much earlier whereas the Himachal Pradesh has made a slight increase now.

The Spokesman said that VAT in Himachal Pradesh had not been levied on agriculture implements, agriculture/horticulture produce, aids and implements used by handicapped persons, animal feeds and feed supplements, articles made of bamboo wood used for agriculture purpose, Baan, Bangles of all types, Books, periodicals and journals, Bread, Charcoal, Charkha, handloom, Himachal Handloom articles, Himachali Handloom shawls, loi, pattu, caps, chemical fertilizers, bio fertilizer, mico nutrients, coarse grain, condom and contraceptives, cotton yarn and silk yarn in hand, curd, lassi, butter milk and separated milk, earthen ware, electric energy, fire wood, fishnet, fish fabric, fish sheets.

The VAT has also not been imposed on food grains supplied by Government of India (PDS,BPL, Antodaya Anna Yojna and Annapurna Yojna), fresh fruits, fresh milk and pasteurized milk, fresh plant, sapling and fresh flowers, fresh vegetables, garlic, ginger, green chillies, onions, potatoes and their seed, goods sold to the serving military personnel and ex-servicemen by CSD, good taken under customs bond for re-export, graphite pencils, writing chocks, writing slates, crayons, sketch pens, drawing colours, erasers, sharpeners, foot rules, geometry box, exercise and drawing boxes of all types, gur and jaggery, hawan samagary, human blood and blood plasma, indigenous hand made musical instruments, kerosene oil sold through PDS, Khadi garments, Kirpan, kumkum, bindi and sindoor, leaf plates and leaf cups, meat, fish, prawn, eggs and livestock, mishri, patasha, fulian, makhana, chirbra, National Flag, non-judicial stamp papers sold by Government Treasuries, postal items sold by Government, rupee note and cheques, organic manure, papad, rakhi, raw wool, salt, seed of all kinds except oil seeds, semen including frozen semen, silk

worm laying cocoon and resin, tender green coconut, water other than aerated, mineral, distilled have also been exempted from VAT in Himachal Pradesh.

The Spokesman said that the State has also not increased VAT rate on petrol and diesel inspite of the fact that most of the States in the country have much higher rate on these items ranging from 33 percent (petrol) and 25 percent diesel.

He said that the proposed increase of VAT rate by 1.25 percent is a minimal enhancement and will not affect the prices of the commodities much, Moreover, the increase proposed was only on luxury items such as television, refrigerators, washing machines, air conditioners, air purifiers, arms and ammunition, carpets, cigarettes and cigars, duplicating machines, floor tiles, furniture, glassware, articles of ivory, rosewood and sandal wood, crockery and cutlery, motor vehicle leather goods, paints and enamel, tyre and tubes, transport equipments, cosmetics, timber etc. which does not affect the poor and economically weaker sections of the society.

The Spokesman said that the State Government has already extended concession under CST Act in the shape of reduction of CST rate from 4 percent to 2 percent to general traders and just 1 percent CST rates to industrial concern which is unprecedented in the entire country keeping in view the welfare of trading community in the State.

He said that the increase in VAT rate in Himachal Pradesh on luxury items had been done by only 1.25 percent, i.e. from 12.50 percent to 13.75 percent and was the outcome of broader consensus arrived at the Empowered Committee of Finance Ministers of all the States on the basis of the fact that the postponement of implementation of GST from 2010 to 2011 has strained the financial position of the State. The Empowered Committee has given its approval to States to mobilize additional revenue by increasing VAT rates till the GST was adopted.

The Spokesman said that the notice was also given in this respect and uptill the expiry of 10 days notice period, no representation or objection has been received from general public and the consumers at large in the State who were going to pay the increased quantum of VAT on the purchase to be made by them. The objections raised by various Beopar Mandals, Traders and Industrial Associations does not seem to be justified as this will ultimately pass on consumers that to purchasing of luxury items.

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