Cong demands roll back of VAT rates in state

Bhubaneswar: Dubbing the state government as "anti-poor", Opposition Congress today demanded a roll-back on the decision to raise the minimum rate of VAT to five per cent.

"We are opposed to the increase in the rate of VAT on the essential commodities like medicine, clothes, sugar and other items. The government must withdraw its decision," said Leader of Opposition Bhupinder Singh of Congress, before leading a walkout from the House.

The issue relating to the VAT was discussed through an adjournment motion moved by the Congress in the assembly. The opposition members raised the issue a day after the Finance Minister Prafulla Ghadai in his budget speech announced the government`s decision to raise the rate of VAT on 130 items from four per cent to five per cent.

"The government`s decision will hit the poor man due to hike in the price of essential commodities. The state government had last year raised the rate of VAT from 12.5 per cent to 13.5 per cent on consumer durable items. This time they have hit the poor man," Congress Chief Whip, Prasad Harichandan alleged.

While the government imposed tax on the poor, Harichandan said that it had exempted cess and land revenue, water tax on certain industries. "You (government) are taxing the poor people and evading tax on industries."

Defending the state government`s decision, Finance Minister Ghadai said, "All states except West Bengal and Kerala have already raised the minimum slab of VAT to five per cent. We have decided to raise the rate of VAT from April 1, 2012 as per the direction of the Centre which wanted uniformity in taxation."