The announcement will be made soon, also preparing to take an overdraft from the Reserve Bank.
Earlier, the government had decided to withdraw VAT reduction on fuels, a decision was taken to replenish the state exchequer.
Gujarat may soon increase VAT on fuels including petrol and diesel. According to sources, the Gujarat government may increase the VAT on fuel by three to five per cent based on the recommendations of an advisory assemble set up by the government to boost the state’s economy and increase revenue to the exchequer. The hike could lead to an grow in petrol and diesel prices by Rs 5 to Rs 7 per liter.
If the economic situation improves, it will give relief again.
The current Corona transition has cost the government an original amount of money, from treating patients to everything else, against which the government’s revenue has almost crash due to the shutdown so far. The government is now review raising VAT on fuels to ease the burden on the exchequer and maintain a steady source of revenue. Government sources said that the current state of the state pocket is critical and if it continues for another month, the government will have to spend a lot of money in the near future to provide facilities to the people or other expenses. Therefore, the government is currently review raising VAT on petrol and diesel to increase revenue. However, in the near future, if the economy situation improves, the government may again reduce the rate to provide relief to the people.
Currently 17% VAT was reduced in 2018
Currently, the state levies 17 per cent VAT on petrol and diesel. After the central government announced a reduction of Rs 2.50 per liter in petrol and diesel prices in 2018, the state government also announced a reduction of Rs 2.50 per liter, which is almost equivalent to a three per cent reduction in VAT on basic prices. The announcement cost the government an estimated Rs 2,000 crore annually. Earlier, during the Gujarat Assembly elections, the state government had also announced a four per cent reduction in VAT on petrol and diesel. Thus, there has been a decline of about seven per cent in the last three years.
Gujarat will take overdraft
Sources always said that the state government may have to take an overdraft as the expected revenue standard is not support in the first quarter of the current financial year. Earlier, the state government had to take overdraft for three running years after 2000 due to narrowing of the economy due to hurricanes, temblor and riots, but it has never had to take overdraft since then. However, this year the situation is different and an overdraft has to be taken.
Possibility of reduction in stamp duty
The Gujarat government may report a reduction in stamp and booking duties to help the forming application , which is facing economy crisis.
This report will be made for the duty of ready houses instead of the booking done at the time of purchase of lands. It will benefit consumers. According to sources, relief in stamp duty of about three per cent is being considered. The state government has lost about Rs 2,000 crore in revenue under stamp duty under normal circumstances.