Gujarat government and the opposition Congress had a heated exchange of arguments in the Assembly Thursday on the issue of levying value-added tax (VAT) on fertilisers. Chief Whip of Congress, Balvantsinh Rajput, said that initially VAT was introduced on fertilisers only for one year, but it had continued for seven years. To this, Finance Minister Saurabh Patel said that Empowered Group of Ministers took decision on the issue while adding that many other states of the nation also levy VAT on fertilisers.

The argument started with a starred question asked by Congress MLA from Bhiloda, Anil Joshiyara seeking details on how much VAT and Additional Tax was being levied on fertilisers in Gujarat. Finance Minister Saurabh Patel provided information that Gujarat was levying 4 per cent VAT and 1 per cent additional tax on fertilisers and in last two years income through those taxes was around Rs 227 crore.

The heated arguments commenced in the subqueries by Congress MLAs on whether the state government wanted to waive the VAT and additional tax on fertilisers since it caused financial burden on farmers.

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Rajput said that the VAT on fertilisers was introduced by the then finance minister Vajubhai Vala while stating that it was being introduced only for one year to strengthen the economy. “Despite this, the state government has been levying VAT on fertilisers for the past seven years,” Rajput said.

Replying to this, Patel said that Congress had been spreading wrong message that Gujarat was the only state in the country that levy VAT on fertilisers. “For the past some years, you have been spreading this false information. I expect you to stop it now,” Patel said while giving out a list of other states that levy VAT on fertilisers include Bihar, West Bengal, Andhra Pradesh, Arunachal Pradesh, Chhattisgarh, Goa, Madhya Pradesh, Jammu & Kashmir, Karnataka, Manipur, Mizoram, Meghalaya, Sikkim, Tripura and Rajasthan. Rajput replied back that he wanted to know if, the government was planning to roll back the VAT on fertilisers. Patel said, “Empowered Group of Ministers has taken this decision (of levying VAT on fertilisers) and it is accordingly being collected.”

Value-Added Tax (VAT) on diesel has been one of the major sources of revenue for Gujarat government among other such commodities like petrol, CNG, PNG and fertilisers. As per the figures presented before Gujarat Assembly by Finance Minister Saurabh Patel, VAT on petro fuel alone has earned Rs 16,113 crore, including Rs 9,398 crore VAT on diesel, in the past two calendar years. Patel provided the details on state income through VAT on these commodities before Gujarat Assembly in replies to set of identical starred questions.

According to him, Gujarat government is levying 23 percent VAT on petrol, 21 percent on diesel, 12.50 percent on CNG & PNG, and 5 percent on fertilisers. In the last two calendar years, income through VAT on diesel has been Rs 9,398 crore, on petrol Rs 4,222 crore, on CNG Rs 438 crore, on PNG Rs 2,055 crore and on fertilisers Rs 268 crore. The BJP Government in Gujarat has been facing criticism of not decreasing the VAT charges on fuel despite the fact that prices of oil in international market have gone down.

Meanwhile, Gujarat Assembly passed the Gujarat Stamp Bill, 2016 with majority, Thursday. Among other, the Bill proposes to extend time limit for companies registered under the provisions of Companies Act to get any order related to its reconstruction or amalgamation passed by Gujarat HC stamped.

The present time limit of one working day after the order is passed has been extended to 30 days after copy of the order is received. During the discussion on the Bill, some Congress MLAs opposed it saying that the ruling BJP was thinking only about big companies while ignoring farmers and their needs.