Rajasthan increases VAT, burdens common man

Jaipur, Feb 3: There is no end to the woes of the common man in Rajasthan. The government may be applauding itself for getting two of its cities (Jaipur and Udaipur) on the Smart City bandwagon but it is giving taxing time to its people.

Already reeling under several taxes, Rajasthan has further burdened its people by increasing the value added tax by 0.5 % on 1000 items and also 5% on direct-to-home TV in a hurry just before the annual Budget.

With the increase in taxes, people in Rajasthan would now have to pay 6% extra taxes. The government is likely to increase its tax earnings by Rs 30 lakh everyday. Rajasthan earns around Rs 14,000 crore from VAT, out of which 70% taxes come from petrol, diesel, 15-20% from tobacco and others from food and electronic items.

The notification to this effect was issued on Feb 1, 2016 late at night around 11:30 pm and the order got implemented within half an hour from Feb 2, 2016. The notification says it is being done in the public interest. By amending the Rajasthan Value Added Tax , 2003, the goods taxable at 5% till now would be taxed at 5.5%.

The state government has also increased 5% tax on Direct to Home Services by amending the Rajasthan Entertainments and Advertisements Tax Act. This would come into effect from today. The existing 10% tax has been increased by 5% and now stands at 15%.

People in Rajasthan are already paying the 0.5% cess for Swachch Bharat Abhiyan from Nov, 2015. From now on people would have to cough up an extra six percent tax.

There is no clarification on the increase of taxes just before the budget even as the finance department keeps mum. In its campaign to become a smart city, there is talk of levying taxes on Jaipurites.

Denizens of Jaipur would perhaps have to shell out more money as Urban development Taxas the Jaipur Municipal Corporation plans to levy tax to make Jaipur smarter. A Tourism Development Fees is likely to be imposed on tourists on per night basis, who would use the smart devices in the city during their stay. The fees is likely to depend on the ranking of the hotels.

Tax expert Nandlal Agarwal said Rajasthan already levies more VAT (now 5.5%) on certain items like farm machinery, medicinal items as compared to its neighbours Haryana, where the VAT is 4.5%. The common man is likely to be the most burdened as at least 1000 items like furniture, tiles, restaurants under the list. So there is likely to be an increase of around Rs eight to nine thousand in the household budget.

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