Ashok Chavan justifies 1% hike in VAT

Maharashtra chief minister Ashok Chavan today justified the hike of 1% in existing VAT saying that the state government had the right to decide on taxation to augment its resources.

"There is nothing wrong with it," Chavan said while addressing a press conference after hosting the customary tea party on the eve of the first budget session of the state legislature beginning here tomorrow.

The government has hiked the Value Added Tax (VAT) from 4% to 5% last week.

Chavan criticised the opposition Shiv Sena-BJP and MNS for boycotting the tea party hosted by him. "It is customary for them to do so. My government is ready to discuss any issue raised by them during the session," he said. 

The chief minister said the government has already taken steps to ease the hardships of the common man due to price rise.

"We have spent Rs 120 crore as subsidies to make available five essential commodities at the PDS. Even the Centre has appreciated our efforts. I don't deny that the price rise does not exist," he said. 

When asked about MNS's threat not to allow foreign artistes to work in Mumbai film industry, Chavan said it was the job of the police to check if foreigners working in Mumbai film industry have valid documents or not. "Others need not interfere," he said.

Chavan said the government has proposed to set up a Special security board and will bring an ordinance to this effect in the coming session.

In order to regularise the Money lending activity, the government will bring in Maharashtra Money lenders (regulatory) ordinance, he said.

Similarly, the government is planning to amend the Mumbai entertainment tax act to enable cinema owners to levy service tax. Under the provisions, concessions would be given in entertainment tax to programmes organised by educational
institutions, government.