Sarbanda government now administers bitter pill

VAT raised to 6%

TO BE COSTLIER

*    LPG cylinder

*    Petrol

*    Diesel

*    Cable/DTH TV

*    Pre-owned cars

*    CFL bulbs

*    Plywood

*    Automobile spare parts

*    Sugar

*    Cooked food

*    Some medicines

BY OUR STAFF REPORTER

GUWAHATI, July 5: Change does not come easy or cheap. For the people of Assam who voted for change overwhelmingly this time around, it is time to take bitter medicine - courtesy the new BJP-led alliance government. Already groaning under the burden of rising prices, people in the coming days will find several commodities costlier still. The reason is higher rates of value added tax (VAT) and entertainment tax, which Dispur has now administered after some 'feel-good' announcements earlier.

Through a notification released by the Fince department on Tuesday, VAT has been raised by 1 percent from 5 percent to 6 percent. This will impact as many as 129 items under 2nd schedule of Assam Value Added Tax Act, 2003 (Assam Act VIII of 2005). Commodities which will become costlier range from sugar and cooked food to CFL bulbs, some medicines and plywood to automobile spare parts.

The State government has also targeted TV viewing households for more revenue by raising the entertainment tax under the Assam Amusements and Betting Tax Act, 1939. Cable TV viewer households will have to fork out Rs 20 extra per month; for households with DTH (direct-to-home) TV set-ups, the additiol monthly payout will be Rs 30. Hotels will have to pay additiol Rs 50 for each TV set, cable or DTH. With television having become ubiquitous in Assam households, the State government is set to mop up substantial revenue through this route.

There is more bad news for households with LPG cylinders set to be costlier by Rs 14, the State government having decided to withdraw the partial exemption of this amount granted to oil companies from 21 July, 2011. So this extra burden has been shifted to households now. This move is expected to net in considerable savings for the government.

Diesel and petrol too will now cost more in Assam - another avenue for squeezing out considerable revenue. The VAT on diesel has been modified to '20 paisa in the rupee or Rs 8.75 per liter, whichever is higher'. Likewise, VAT on petrol and other motor spirits has been modified to '29 paisa in the rupee or Rs 14 per liter, whichever is higher'. Earlier, the VAT stood at 16.5 paisa in the rupee for diesel and 25.75 paisa in the rupee for petrol.

Even pre-owned cars will blow a larger hole in the buyer's wallet, with such cars of capacity upto 1,000 cc set to cost Rs 3,000 more. Earlier, customers in the State paid Rs 3,000 VAT for pre-owned cars; now they will have to pay Rs 6,000.

After the first cabinet meeting on June 27, PWD minister Parimal Suklabaidya, while briefing scribes, was at pains to tom-tom big ticket announcements. But he had then made no mention that the government was gearing up to impose a bigger tax burden upon the people.

Earlier in the assembly, Fince minister Himanta Biswa Sarma while tabling the White Paper on the State's Finces, had pushed the opposition Congress on the backfoot about how the new government has inherited an immediate liability of Rs 10,000 crore.

There was then much talk about Chief Minister Sarbanda Sonowal pressing upon the Centre to give Assam support to tide over this crisis. The question making the rounds is - has the State government now decided to pass on a substantial part of this burden to the people? If that is so, it will be a case of 'jor ka jhatka dheere se', a shock therapy administered to the people gently but inescapably.