In a major relief to lakhs of middle class tax payers and people at large in his maiden budget, Gujarat Finance Minister Kanubhai Desai on Thursday exempted a huge chunk of low salaried people from Profession Tax as well as reduced the value-added tax (VAT) on petrol and diesel by 4.5% and 7.5% respectively. This has in one stroke made the fuels cheaper by Rs 7 a litre.
Presenting a Rs 2,43,965 crore annual budget for 2022-23, which is the Bhupendra Patel Government’s first and last budget in an election year, the Finance Minister has ensured there is no hike in the taxes even as he pegged Gujarat’s growth to touch 13% of the Gross State Domestic Product for FY23.
Desai informed the State Assembly that Gujarat had continuously jacked up its budget every year in the last two decades but the government had not taken overdraft.
Speaking the Profession Tax exemption, the Finance Minister said, “I propose that persons who receive salary or wages up to Rs 12,000 shall be fully exempted from Profession Tax. This will provide a relief of about Rs 198 crore to about 15 lakh middle class taxpayers. This will cause a dent in the State’s revenues by about Rs 108 crore.” Under the existing structure, those earning salaries between Rs 6,000 and Rs 8,999 per month used to pay Rs 80 and those in the salary bracket of Rs 9,000 to Rs 11,999 a month had to pay Rs 150 as Profession Tax.
Similarly, VAT has been slashed on petrol and diesel with a view to providing a huge relief to the people after the sledgehammer impact on the middle class’ finances by the Covid-19 crisis.
“I propose no change in existing tax rates and no new taxes are proposed in this budget. I am delighted to announce to this august House that we are announcing relief to the neo-middle class, who are salary or wage earners in the public or private sector,” Desai said.
The Finance Minister proposed several other tax reliefs as under:
• Exemption from stamp duty for loan to self-help group-Sakhi Mandal and LPG connection under Pradhan Mantri Ujjawala Yojana to Women.
• Exemption from payment of motor vehicle tax to contract carriage buses.
• Exemption from payment of municipal property tax to hotel, restaurants, water parks, cinemas-multiplexes and gymnasiums.
• Exemption from payment for fixed charge in electricity bill to hotel, restaurants, water parks, cinemas-multiplexes and gymnasiums.
Desai made the maximum allocation of Rs 34,884 crore for primary and secondary schools as well as institutions of higher learning, followed by power and petrochemicals with Rs 15,568 crore, urban development Rs 14,297 crore, health Rs 12,240 crore, roads and building Rs 12,024 crore, panchayat and rural development Rs 9,048 crore, home department Rs 8,325 crore, agriculture Rs 7,737 crore, Narmada project Rs 7,090 crore, industry and mines Rs 7,030 crore, water supply Rs 5,451 crore, water resources Rs 5,339 crore, women and child welfare Rs 4,976 crore, social justice Rs 4,782 crore, revenue Rs 4,394 crore, tribal development Rs 2,909 crore, labour department Rs 1,837 crore, forest and environment Rs 1,822 crore, food and civil supplies Rs 1,526 crore and ports and transport Rs 1,504 crore.
Other allocations include:
* Horticulture ₹ 369 Cr
* Fisheries provision ₹880 Cr
* Cooperative sector ₹1,323 Cr
* Tourism, pilgrimage and civil aviation ₹882 Cr
* Science and technology ₹670 Cr
* Statue of Unity Ekta Nagar provision ₹652 Cr