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Maharashtra hikes price of liquor, sugar and textiles

Liquor and beer served in star hotels and permit rooms, sugar, textile and tobacco imported from abroad, cigarettes and branded varieties of flour, atta and maida will become dearer in Maharashtra following a hike and new taxation proposals announced by Finance Minister Mahadeorao Shivankar in the budget for 1998-99 which was presented in the state legislature on Monday.

Liquor, including beer served in four- and five-star hotels, is proposed to be taxed at the rate of 20 per cent while liquor, including beer served in other permit rooms, will be taxed at the rate of 13 per cent.

Sales tax at the rate of four per cent is proposed to be levied on sugar, textile and tobacco imported from abroad. Sales tax at the rate of four per cent is proposed to be levied on flour, atta and maida sold under brand names.

Shivankar's budget has a deficit of Rs 8.4629 billion, and leaves an uncovered deficit of Rs 462.9 million.

Presenting the budget estimates, Shivankar said out of the total deficit, he proposed to make good Rs 6 billion by way of various resource mobilisation proposals which would reduce the deficit to Rs 2.4629 billion.

The minister also hoped to net an additional Rs 2 billion by gearing up the tax collection machinery during the course of the year and tightening up various economy measures, especially on non-plan expenditure front, which would further reduce the deficit to Rs 462.9 million which he has left uncovered.

During the year 1998-99, Shivankar estimated the government's total expenditure was in a region of Rs 353.214 billion as against the anticipated total receipts of Rs 341.860 billion, leaving unadjusted an overall deficit of Rs 11.3532 billion. This deficit, after adjusting with the opening surplus balance of Rs 2.8903 billion, is expected to post the total deficit at Rs 8.4629 billion.

Emphasising the need to have an efficient and fair tax administration in the state, he said his government had made several concessions to common citizens.

Besides exempting tax on writing instruments, bamboo handicraft, towels and Sholapur chaddar, he proposed to cut taxes on dental equipment, intra- ocular lenses, ayurvedic medicinal plants, cotton bags, imitation jewellery, loose tea, katechu, betelnut, steel, wool, poppy seeds, kerosene and lubricating oil.

The minister also proposed to set up a business advisory council to advise the government on issues relating to taxation and simplification of procedures which include abolition of octroi.

The minister also proposed to set up a committee comprising medical experts to examine various issues relating to tax exemption on new drugs and their remedies. After the recommendations of the committee, a fresh list of life-saving drugs would be notified for tax exemption.

While the government has no intention to tax intangible goods unless they are specified, it has now decided to set up a committee to consider all the issues relating to the sales tax settlement commission.

The government also intended to introduce a scheme of voluntary registration of sales tax for new entrants to business who desire to obtain such registration by depositing a prescribed amount of advanced tax which would be adjusted against the future tax liability.

UNI

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