The Haryana Cabinet today decided to reduce rate of Central sales tax on inter-state sales of Maruti vehicles from 2 per cent to 1 per cent to provide them a level playing field in the market. Maruti Suzuki India Limited had represented that in view of general reduction in rate of Central sales tax from 3 per cent to 2 per cent with effect from April 1, 2007, the rate of Central sales tax on interstate sales be reduced. This reduction in tax in the state would be effective from November 1.

With this reduction in tax, the buyers of Maruti vehicles would benefit to the tune of Rs 140 crore for the remaining period of the current financial year. This benefit would be Rs 200 crore per annum for the subsequent years.

The Cabinet also decided to reduce rate of tax on barley sprout from 12.5 per cent to 4 per cent on the recommendation of the state-level consultative committee. The decision to reduce tax would benefit consumers to the tune of Rs 4 lakh per annum. The Cabinet also decided to reduce the rate of VAT on sale of earth-moving equipment sold to state and Central government departments and union territories, public sector undertakings and municipal bodies from 12.5 per cent to 4 per cent. With this reduction, the state exchequer would bear a burden of Rs 1 crore on the current projected sales.