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Urban Punjab to pay property tax; VAT up by 0.5%
Sarbjit Dhaliwal/TNS

Cabinet nod to Fresh taxes Property tax in urban areas to generate Rs 360 crore a year 0.5% VAT increase to fetch state Rs 400 crore 1% social infrastructure cess on registration of land and other property deeds to generate Rs 480 crore Cabinet nod to extension in service or re-employing of retiring employees to postpone the liability of Rs 1,000 crore per annum Luxury tax on hotels, marriage palaces up by 4-8% To address shortage of doctors, a special appointment and transfer policy has been okayed

Chandigarh, August 28
The Punjab Cabinet on Tuesday approved various tax proposals to mop up additional revenue of around Rs 900 crore per annum. The Cabinet, which met here today, approved the levying of property tax in urban areas. It would generate additional revenue of Rs 360 crore per annum. It would go to the Local Bodies Department and not to the state treasury.

Apart from it, the Badal government will give extension in service or re-employ the retiring employees to postpone the liability of Rs 1,000 crore per annum (but only for two years). The state government has to pay around Rs 1,000 crore per annum as provident fund and other dues to employees who retire. However, by re-employing them for two years, the state government intends to avoid the payment of Rs 2,000 crore at least for two years to retired employees.

Finance Minister Parminder Singh Dhindsa said the Cabinet today gave its approval to amend the service rules to give re-employment. He said after the rules are amended, the re-employment process would start (most likely from September onwards). In the first phase, re-employment would be given for one year. Retired employees opting for re-employment would have to give an undertaking that they would not withdraw their fiscal benefits, which they were entitled to on attaining the age of superannuation — 58 years in Punjab — till the end of their re-employment period.

Officials sources said the Cabinet approved the increase in the VAT by 0.5 per cent on various items. Giving a break-up, a senior official said there would be an additional income of Rs 400 crore from the 0.5% VAT increase.

Owing to levying of 1 per cent social infrastructure cess on registration of land and other property deeds, there would be additional revenue generation of Rs 480 crore. This also includes the increase in the upper limit of registration fee from Rs 30,000 to Rs 2 lakh. Apart from it, the increase in the mutation fee, facilitation charges at “fard kendras” was also approved by the Cabinet.

Besides it, there would be additional revenue generation of Rs 108 crore due to approval given by the Cabinet to increase various charges in the Transport Department. It includes the charging of motor vehicle tax at a uniform rate of 6 per cent on all types of vehicles besides lump sum motor vehicle tax would also be levied on the transfer of all kinds of vehicles ranging from Rs 250 to Rs 7,500. Likewise, motor vehicle tax has been enhanced on goods carriages, contract carriages, private service vehicles, tourist buses and vehicles plying on all-India tourist permit. The buses plying on contract carriage permit or tourist permit of other states entering Punjab without payment of motor vehicle tax on entry point would be liable to pay a penalty of Rs 50,000 for first offence and Rs 1 lakh for the subsequent offence. However, on third offence, the erring owner or driver of such vehicle could be jailed for up to two years.

From licence fee on industrial units, there will be additional generation of revenue of Rs 20 crore.

Giving details regarding the property tax, a senior official said on houses measuring 50 yards, the property tax would be Rs 50 per annum and on houses measuring 100 yards, it would be Rs 150 per annum. On houses measuring above 100 yards and other buildings and properties, it would be charged on unit area basis. It would also be charged on vacant plots and other such properties. Entire state would be divided in 8 zones. For each zone, prices of properties would be fixed by the Deputy Commissioners and other authorities concerned. On the basis of price and type of property, the tax would be calculated. However, there would be no tax on cremation grounds, religious places, ‘gaushalas’, animal care centres ete. However, schools and other educational institutions will have to pay it.

At present, the income from house tax is Rs 178 crore per annum. However, it will cease to exist with the levying of the property tax. House tax is charged only on rented buildings. The Cabinet has also enhanced the recruitment age from 37 to 38 for government services.