Daily use items in the city are all set to get more expensive, as the Chandigarh Administration has decided to increase the Value-Added-Tax (VAT) by 1 percentage point. Against the existing VAT of 4 per cent, the Administration has decided it to hike it to 5 per cent . UT Administrator Shivraj V Patil is likely to allow the hike, after which the new rates would be applicable.

With the increase in VAT, prices of commodities including kitchenware, computers, stationery items, electronic gadgets, skimmed milk, handicrafts, machinery, hand tools, sweets, and all equipment and articles that fall in the Schedule-B Category would be more expensive. It has also been decided to exclude poultry and aqua feeds and their feed supplements from VAT. The Administration is aiming to collect an additional revenue of around Rs 20 crore through the hike in VAT.

According to senior officials of the Chandigarh Administration, the city is probably the only one in the country which is levying 4 per cent VAT, while the rest of the country is levying 5 per cent VAT on articles/ commodities covered under Schedule-B of the Punjab VAT Act, 2005.

The hike was pending for long. As such the rest of the country is levying 5 per cent VAT on such articles. We have already invited objections/ suggestions from people and after taking all such recommendations, suggestions and objections into account, we have proposed the hike. With the hike, not only will additional revenue be generated but the tax will also be at par with neighbouring states, pointed out a senior UT official.