M A I N   N E W S

Uniform ST on cars from May 15
By Rajendra Sharma
Tribune News Service

CHANDIGARH, May 11 — All States and Union Territories in the country have decided to hike sales tax on motor vehicles to 12 per cent from May 15.

Mr Raj Kumar, Excise and Taxation Commissioner of Haryana, says that if any State does not implement this decision, the Union Government has warned, its Central assistance will be slashed.

He revealed that with a view to ensuring uniformity in the sales tax all over the country, the Centre had convened a meeting of Finance Ministers of all States in Delhi on May 9. Earlier, this meeting was scheduled to be held on May 4. However, it was cancelled at the last moment.

Till now different States had different sales tax structure. The Haryana Government had enhanced the sales tax from March 4. However, it had to roll back the hike in the sales tax as the Union Territory of Chandigarh had not accepted its suggestion to effect a similar hike. This had resulted in massive losses in revenue to Haryana as most of the customers had started buying vehicles from Chandigarh. The Punjab Government too had hiked the sales tax to 13.2 per cent from May 1. Since Himachal Pradesh, Haryana and Rajasthan had not hiked the sales tax and it was losing revenue, it, too, had rolled back the hike after a couple of days.

The Chandigarh Administration had also increased the sales tax on the pattern of Punjab from May 1. However, following a public hue and cry it had written to the Union Home Ministry for permitting it to reduce the increase in sales tax. That the Centre did not give its nod to the proposal is a different matter. Therefore, the sales tax in Chandigarh remained 12 per cent from May 1 onwards.

Some of the local dealers had opened their sales office at Panchkula in Haryana or Parwanoo in Himachal Pradesh for the purpose of billing their customers at the lower rate of sales tax. It had naturally become a cause of worry to the Chandigarh Administration.

Himachal Pradesh and Rajasthan were said to be reluctant to increase the sales tax. Now they are left with no option but to fall in line with other States or face a cut in their central assistance which they can ill-afford.

With the enhancement in sales tax, cars will cost Rs 26,000 more, while the price of scooters will go up by Rs 2,000.