The state cabinet on Wednesday approved proposals to mobilise additional resources giving its nod to increase value added tax (VAT) to 40% on cigarettes, cigar, paan masala (without tobacco), ‘khaini, ‘zarda’ and ‘surti’ etc. ‘Bidi’ has, however, been exempted from the increase, which could be about 10% to 15% on different items.
The state government hopes to get an additional revenue of 200 crore. Chief minister Akhilesh Yadav presided over the meeting of the cabinet that also approved a proposal to issue a notification to ban the sale of loose (unpacked) cigarettes in the state. As per the decision, anybody found selling loose cigarettes may be penalized under section 20 of Cigarette and Other Tobacco Products Act-2003.
Such items were causing adverse impact on the health of people, said chief minister while speaking to media persons after the meeting of the cabinet here.
Cars to cost more
The cabinet also decided to partially increase the rate of one-time tax under the provisions of Uttar Pradesh Motor Vehicles Taxation Act 1997. As per the decision, non-transport motor vehicles (personal) have been categorised into two groups. The rate of one-time tax on the four wheeler AC vehicles costing upto 8 lakh would remain in 8% tax category. The tax on SUVs costing more than 10 lakh has been increased from 8% to 10% now.
Similarly, two wheelers have also been categorised into two groups. There would be no change in the rate of one-time tax on twowheelers costing up to 40000. The rate of tax would, however, go up from 7% to 10% for vehicle costing more that now.