Punjab takes taxation route to boost revenue | chandigarh | Hindustan Times
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Punjab takes taxation route to boost revenue

The Punjab council of ministers, which met under the chairmanship of chief minister Parkash Singh Badal on Tuesday, took a series of decisions to generate additional resources and streamline governance.

chandigarh Updated: Aug 29, 2012 10:29 IST
HT Correspondent

The Punjab council of ministers, which met under the chairmanship of chief minister Parkash Singh Badal on Tuesday, took a series of decisions to generate additional resources and streamline governance. The imposition of fresh taxes and rationalisation of existing ones are expected to fetch the state government an additional revenue of Rs 900 crore annually.


The cabinet approved the state local government department's proposal to levy property tax on unit-area basis. The tax would be payable on self-assessment basis, based on the actual market value of the property, to be determined by municipal corporations or committees in consultation with the deputy commissioners concerned. This step is expected to generate an additional revenue of Rs 180 crore annually.

Bowing to pressure from the ruling Shiromani Akali Dal's alliance partner Bharatiya Janata Party (BJP), the cabinet decided to roll back its decision to levy 5% value-added tax (VAT) on sugar. As a result, the government would lose Rs 100 crore in revenue. "The government would take a liability of Rs 100 crore to ensure that the common man gets sugar at cheaper rates," an official spokesman said.

In the budget for the financial year 2013-14, presented by the government in June, VAT had been imposed on sugar. However, the state unit of the BJP prevailed upon the senior ally to secure a rollback. The BJP has also demanded withdrawal of the ban on property transaction through power of attorney, but the government is yet to announce its decision on the issue.

Meanwhile, the cabinet approved the revenue department's proposal for levying social infrastructure cess for health and education at the rate of 1% at the time of land registration. The upper limit for registration fee had been increased from Rs 30,000 to Rs 2 lakh. The increase in mutation fee and facilitations charges at fard kendras and suvidha centres was also approved. These proposals would fetch an additional revenue of Rs 480 crore every year.

According to the spokesman, the cabinet also decided to offer the option of re-employment for one year to all retiring employees at the age of 58 years. This has been done to meet the shortage of 35,000 employees, whose recruitment process would take about a year. To ensure that the decision does not adversely affect employment prospects of the youth, the maximum age limit for recruitment to government service would be enhanced from 37 to 38 years, the spokesman said.

The cabinet also approved proposals of the excise and taxation department for generating an additional revenue of Rs 300 crore annually, including hiking the VAT rate on various goods by 0.5%. However, declared goods, mainly food items, have been exempted from this hike. Other proposals okayed include hiking luxury tax on hotels and marriage palaces from 4% to 8%, rationalisation of VAT on shoes, imposition of processing fee of Rs 800 on VAT dealers and increase in lump sum tax payable by brick-kiln owners.

The cabinet also approved constituting a one-member tribunal for the quick disposal of land acquisition cases by amending Section 60 and other related sections of the Punjab Town Improvement Act, 1922.

The cabinet decided that buses plying on contract carriage permit or tourist permit of other states, which enter Punjab without payment of motor vehicle tax at entry point(s), would be liable to imposition of penalty for the first offence of Rs 50,000 and Rs 1 lakh for subsequent offence and later imprisonment up to two years.

The cabinet also approved rationalisation of the motor vehicle tax. This step is likely to generate an additional revenue of Rs 108 crore annually. The tax would be levied at the uniform rate of 6% on all types of vehicles, besides lump sum motor vehicle tax on the transfer of vehicles, ranging from Rs 250 to Rs 7,500. Similarly, the motor vehicle tax has been enhanced on goods carriage, contract carriage, private service vehicles, tourist buses and vehicles plying on the all India tourist permit.

The cabinet also approved the Mining Policy-2012 for the auction of sand and stone mines in the state, along with policy guidelines for the registration and working of stone crushers with a clause that environmental clearance fee would be borne by the contractor. Under the new policy, the number of mines has been increased to bring down the prices of sand and gravel.

The cabinet gave the nod for the recruitment of 5,078 teachers of the master cadre and 100 of art and craft on a consolidated pay of Rs 6,000 and Rs 5,800 per month for three years on the contract basis amongst the TET qualified candidates. The cabinet also approved to increase the contractual pay of 12,970 teachers working in the Sarva Shiksha Abhiyan (SSA) and Rashtriya Madhyamik Shiksha Abhiyan (RMSA) equivalent to the pay of regular government teachers. This decision would entail a financial liability of Rs 70 crore on the government and Rs 130 crore on the Centre.

The cabinet also approved reviving 60 vacancies of the Punjab Civil Service (PCS, Executive Branch) cadre, of which 30 would be filled through direct recruitment and 30 by promotion.

The cabinet okayed enhancing the pension of chairman and members of the Punjab Public Service Commission (PPSC) at the rate of Rs 1,300 and Rs 1,100 per month, respectively, for each completed year of service as the chairman or member, as the case may be, subject to a maximum of Rs 7,800 and Rs 6,600 per month, respectively.

The cabinet also approved a new bus stand at Rupnagar, thereby transferring 4.54 acres of the Improvement Trust, Rupnagar, to the depot manager, Punbus, Rupnagar, and 2 acres to the general manager, Punjab Roadways, Rupnagar.

Great expectations

Rs 900 crore
Additional revenue expected

Rs 480 cr
Imposition of social infrastructure cess for health and education at the rate of 1% at the time of land registration; hike in upper limit for land registration fee from Rs 30,000 to Rs.2 lakh

Rs 300 cr
Taxes levied by excise and taxation department, including increasing VAT by 0.5% on sale of various goods

Rs 110 cr
Rationalisation of motor vehicle tax at uniform rate of 6% for all vehicles

All figures approximate