In his maiden budget in an election year, Gujarat Finance Minister Kanubhai Desai on Thursday exempted a huge chunk of low salaried people from Profession Tax and slashed the value-added tax (VAT) on petrol and diesel by 4.5% and 7.5% respectively. With this, petrol and diesel have got cheaper by Rs 7 a litre.
This is the Bhupendra Patel Government’s first budget as well as the last one given that Gujarat to the polls at the end of this year.
Desai, who presented a Rs 2,43,965 crore annual budget for 2022-23 in the State Assembly, claimed that Gujarat’s growth rate would reach 13% of the Grosss State Domestic Product for FY23.
Referring to the profession tax exemption, the Finance Minister said, “I propose that persons who receive salary or wages up to Rs 12,000 shall be fully exempted from Profession Tax. This will provide a relief of about Rs 198 crore to about 15 lakh middle class taxpayers. This will cause a dent in the State’s revenues by about Rs 108 crore.”
Under the existing structure, those earning salaries between Rs 6,000 and Rs 8,999 per month used to pay Rs 80 and those in the salary bracket of Rs 9,000 to Rs 11,999 a month had to pay Rs 150 as Profession Tax.
Similarly, VAT has been slashed on petrol and diesel with a view to providing a huge relief to the people after the sledgehammer impact on the middle class’ finances by the Covid-19 crisis.
“I propose no change in existing tax rates and no new taxes are proposed in this budget. I am delighted to announce to this august House that we are announcing relief to the neo-middle class, who are salary or wage earners in the public or private sector,” Desai said.
