Sixth Pay Commission: Uttar Pradesh's new taxes only for rich: Official

Sixth Pay Commission: Uttar Pradesh's new taxes only for rich: Official

20 Sep, 2008

LUCKNOW: A day after Uttar Pradesh hiked levies on laptops, mobile phones and airconditioners - among nearly 100 items - a top official on Saturday described it as a move to mobilise additional resources by "taxing the affluent".

Each of the items for which value added tax (VAT) has been hiked or an entry tax has been reintroduced are usually used by the rich, according to V S Pandey, principal secretary to Chief Minister Mayawati.

"A lot of care has been taken at the highest level to ensure that no item used by ordinary people is subjected to additional taxation," Pandey told.

According to him, "The additional tax on select items would mop up additional annual revenues of Rs 1,200 crores (Rs 12 bn)."

He said: "The state requires nearly Rs 5,000 crores (Rs 50 bn) to meet the burden on account of implementation of the Sixth Pay Commission report, so additional resources need to be mobilised."

The state government Friday night raised the VAT on various items. Entry tax that had been done away with by the previous government has also been reintroduced. While the entry tax varies between two and four percent, the hike in VAT ranges between 12 and 21 per cent as against the existing flat four percent.

Interestingly, the only item for which VAT has been reduced is 'bhang' - a popular intoxicant in semiurban and rural areas. The VAT on bhang has been reduced from 32 per cent to 12.5 per cent.

While cycle tyres have been exempted from the hike, all other tyres have been subjected to an entry tax.

Computers are going to cost more, with VAT going up from four percent to 12.5 per cent. Other items in the list include telephones, CDs, DVDs, wireless equipment and several other electronic gadgets.

The cost of machinery, tools, dyes as well as coffee powder, green tea, cocoa powder will also go up, with an identical rise in VAT from four percent to 12.25 per cent.

Turbine fuel and CNG have been subjected to the steepest hike - from one percent to 21 per cent.


Source: http://economictimes.indiatimes.com/