Abolish surcharge on VAT, Gujarat Chamber of Commerce tells state

Gujarat Chamber of Commerce and Industry (GCCI), the apex body of trade and industry in the state, has urged the state government to abolish surcharge on value added tax (VAT). The GCCI has also recommended parity in VAT rates, reduction in electricity duty, stamp duty and increase in the threshold limit of professional tax.

In a pre-budget memorandum to the state government, the chamber has stated that considering the increase in income from VAT and surplus budget of the last two years, the state government should abolish surcharge on VAT. The VAT revenue has shown a growth of 23.79% compared to the expected growth of around 15%.

Earlier, the state government had expected an income of Rs880 crore from surcharge on VAT, while the chamber had estimated that it would be around Rs1400 crore. The actual figure shows that the GCCI's calculation was correct. As the state's income from VAT is likely to cross Rs20,000 crore, the income from surcharge will also increase.

Besides, the state government's allocation to civic bodies is less than the income from surcharge on VAT. The state government has also allowed a new source of income to civic bodies in the form of collection of professional tax.

GCCI has also asked the state government to reduce electricity duty as it is highest in the country. It has demanded that the electricity duty should be reduced to 7.5% from 10% for small-scale industries, while the same should be reduced to 12.5% from 15% for big industries.  Yet another recommendation of GCCI is to reduce stamp duty by 2%, so that the construction sector gets a boost and affordable houses are built. The registration fees should be in the range of Rs250 to Rs25,000, said the chamber.

The state government has also been requested to increase the threshold limit of professional tax to Rs1.50 lakh.