Mumbai: With large parts of Maharashtra reeling under severe drought, the state Budget presented today proposed hike in taxes on cigarette, tobacco, liquor, cosmetics and jewellery to mop up additional resources to fund relief efforts and meet the state’s development needs.
Deputy Chief Minister Ajit Pawar, who holds the finance portfolio, presented a Rs 184.38 crore surplus budget that seeks to net an additional Rs 1150 crore through increase in taxes.
Presenting the budget proposals in the Legislative Assembly, Pawar said tax on cigarette will be raised from 20 per cent to 25 per cent and bidi from 5 per cent to 12.5 per cent. While 12.5 per cent tax on branded tobacco sold in pouches will remain unchanged, unmanufactured tobacco, which is hitherto tax free, would be taxed at 12.5 per cent.
The Minister also announced increase in excise duty on country liquor, Indian Made Foreign Liquor (IMFL) and strong beer.
Excise duty on country liquor has been raised from Rs 95 to Rs 110 Per Proof Litre (PPL), while on IMFL it has been hiked from Rs 240 to Rs 300 PPL.
Duty on strong beer has been raised from Rs 42 per bulk litre or 175 per cent of manufacturing cost whichever is higher, to Rs 60 per bulk litre or 200 per cent of the manufacturing cost whichever is higher.
Ingredients for making non-alcoholic beverages would now be taxed at 12.5 per cent instead of the earlier 5 per cent.
Noting that taxes on lottery had not been increased in the last few years, Pawar said weekly lottery will now be taxed Rs 60,000, fortnightly lottery scheme or any lottery scheme between a week and a fortnight Rs 1.25 lakh, and monthly lottery or which exceeds fortnight Rs 2.5 lakh and bumper lottery Rs 12 lakh.
The budget also proposed increasing tax on gold, silver and jewellery made from these metals from one per cent to 1.10 per cent.
Cosmetics and shampoo will be taxed at 12.5 per cent, the Minister said, adding that certain products in the category that are sold for medicinal value would, however, attract only 5 per cent tax.
A tax of 5 per cent will be levied on textiles for industrial use. Earlier furnishing cloth was taxed five per cent at the last point of sale, but the budget has, instead of levying tax on all types of textiles, proposed to levy 5 per cent tax on textiles for industrial use.
Tax on paver blocks has been increased from 5 per cent to 12.5 per cent.
Sugarcane purchase tax has also been raised from 3 to 5 per cent for a year to mobilise funds for drought relief.
Pawar said tax exemption on essential commodities, Solapuri chadars and towels and wet dates will continue till March 31, 2014. Similarly, concessional tax rates on tea will also be extended till the end of the next financial year, while rice bran will be exempt from tax.
Sale of water meters to local bodies will also be exempted from tax, the Minister said.
Speaking about state’s financial situation, Pawar said while presenting the budget last year, revenue receipts were estimated at Rs 1,36,711.70 crore and the revised estimates of revenue receipts, considering the trend of revenue collection during the year, have been pegged at Rs 1,44,622.70 crore. Revenue surplus which was expected to be Rs 152.49 crore was now expected to come down to Rs 26.51 crore for the current fiscal.
During the year 2013-14, revenue receipts are expected to be Rs 1,55,986.95 crore and revenue expenditure Rs 1,55,802.57 crore, leaving an estimated surplus of Rs 184.38 crore.
Pawar said the size of the annual plan for 2013-14 has been pegged at Rs 46,938 crore. An amount of Rs 4787.68 crore, which is 10.2 per cent of the annual plan size, has been earmarked for scheduled castes sub-plan, while Rs 4177.48 crore, 8.9 per cent of plan, has been kept aside for tribal sub-plan.
Keeping severe drought in mind, he said, government was fully committed to scarcity mitigation measures on which an expenditure of Rs 1164 crore was expected.
