The state legislature’s budget session started with the Opposition in the Assembly challenging the government’s decision to hike Value Added Tax (VAT) by one per cent on 104 goods.
A government ordinance proposed an increase in VAT from four to five per cent two days ago. On Thursday, the government tabled the ordinance as a Bill in the both the Houses for discussion and approval.
The Opposition said according to the Centre’s rules the government did not have the right to increase the tax and the hike should be revoked immediately. “The state passed the VAT Act in 2005 and had the right to increase or decrease the duty only until 2007,” Leader of Opposition in the Assembly, Eknath Khadse said. “So, the ordinance and the Bill are illegal. The government must revoke it.”
Chief Minister, Ashok Chavan, said that the decision was legal. He insisted that it will not affect people suffering from price rise. The Speaker of the legislative Assembly, Dilip Walse Patil, assured the House that the government will verify legality of the decision and convey it to the House on Friday.
The one per cent hike, applicable from April 1, will generate an estimated revenue of Rs 600 to Rs 700 crore for the state this year.
The hike will apply to drugs, readymade garments, edible oil, utensils, iron and steel goods, non-ferrous metals, information technology products, oil seeds, paper, ink, chemicals, sweetmeats, industrial inputs, packing materials.