Even as the Opposition Congress criticised the Narendra Modi government for keeping the value-added tax (VAT) rates highest in Gujarat, State Finance Minister Vajubhai Vala claimed the rates are not higher as compared to other states.
Replying to a debate on the budgetary demands of his department in the Assembly on Monday, Vala said that as per the decision taken by the Empowered Committee of Finance Ministers to implement the new VAT regime across the country, the tax rates were fixed at 1 per cent, 4 per cent and 12.5 per cent on different categories of goods. The state, however, fixed an additional 1 per cent on the goods falling under the levy of 4 per cent VAT, and another 2.5 per cent on the goods liable for paying 12.5 per cent VAT.
The government has increased the tax rates in both the categories of goods for human resources, balanced socio-economic and infrastructure development in Gujarat, he told the House.
The Congress has, however, contested his claim. In a statement issued this evening, Leader of the Opposition Shaktisinh Gohil said the VAT rates in the state were not only the highest in the country, but also the government has failed to keep its promise to lift the 25-per cent hike in the VAT it had imposed last year.
The government collected an additional Rs 4,000 crore from people of the state through the 25 per cent increase in the VAT last year. It had promised to lift this hike this year, but not to be.
Besides, the fact that the sales tax revenue has increased from Rs 6,252 crore in 2002-03 to a whopping Rs 15,105 crore in 2007-08 amply proves that the VAT rates are much higher in Gujarat, Gohil said.