Cabinet Rolls Back VAT On Sugar, Textiles.

The State Cabinet today approved the rollback of four per cent Value Added Tax (VAT) on sugar and textiles, a move perceived to pacify the agitating sugar and textiles traders in the state.

The sugar traders had threatened to stop imports of the commodity if the state government did not announce a roll back on VAT imposed on the commodity. The Cabinet also gave post-facto approval to waiver of four per cent VAT on LPG and kerosene oil sold through the Public Distribution System (PDS) route. The decision to exempt VAT on LPG and PDS kerosene was announced by the state Chief Minister on Tuesday.

The Cabinet approved certain changes to the Orissa Fiscal Responsibility & Budget Management (FRBM) Act as recommended by the 13th Finance Commission.

Accordingly, the state government will put in place an independent review mechanism to ensure effective implementation of the Act. The state will appoint an independent rating agency or committee to monitor fiscal targets, said finance secretary Jugal Kishore Mohapatra. The 13th Finance Commission had specifically asked the state government to bring down revenue deficit to zero level by 2011-12 and keep it at the same level in the subsequent years. Moreover, Orissa was asked to keep gross fiscal deficit at three per cent by 2011-12 and also continue the same trend in the subsequent years.

Source : Sify.com