State urges Centre to scrap Sales Tax on select items

State urges Centre to scrap Sales Tax on select items
EXPRESS NEWS SERVICE

MUMBAI, JANUARY 10: The state government today urged the Centre to exempt some items from sales tax even as the Standing Committee of State Finance Ministers in New Delhi announced that penal action was being contemplated against states not implementing the decision to adhere to uniform sales tax floor rates and phase out sales tax related incentive schemes by January 15.

In November, states and Union territories had agreed to implement uniform sales tax floor rates and do away with the tax incentives war from January one but thirteen states have not implemented the decision so far.

Maharashtra has already decided to implement the new rates recommended by the committee on January 1 but there have been wide-spread protests demanding a rollback of the new rates.

Interestingly, a Mantralaya release stated that State Finance Minister Jayant Patil told the standing committee that there was a strong need to exempt a number of items from the levy of sales tax. The state government's list includes pasteurisedmilk, garlic and ginger, chilly, branded bread, turmeric, farsan, plastic pipes, agricultural implements, cattle and poultry feed, processed common salt, fertilizers, kerosene distributed under the Public Distribution System, mangalsutras costing up to Rs 5000 and plastic pipes used for irrigating farms.

The minister has also proposed lowering of sales tax from eight percent to four percent for computers and other IT hardware and software, roofing tiles and specified plastic goods like tumblers, jugs, mugs, plastic raincoats as well as tractors and its components, ginning and pressing machinery. It was also been suggested that sales tax on country liquor be reduced to four percent and on molasses from 20 percent to 12 percent to discourage brewing of illicit liquor. The release claimed the committee has agreed to forward the suggestions to the union government.