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Goa too adopts uniform tax policy

Sandesh Prabhudesai in Panaji

Goan specialities like cashew nuts or coconut feni and Goan handicraft, including earthenware, would be cheaper, but only in Goa and not elsewhere in the country.

The tourist state has finally fallen in line over implementing the uniform tax policy. But it has reserved its right to maintain less amount of sales tax on certain items for the benefit of local market, keeping in mind that tourism is the backbone of the Goan economy.

Though Goa had initially not agreed to fully implement the uniform tax policy, warning from the Centre to cut off its central financial assistance has finally compelled the state to follow other states. Two days before the deadline expired, Goa has issued notifications raising sales tax on several items.

Tax on motor vehicles would be now raised to 12 per cent -- from 4 per cent -- from 1 July. Tax on aerated water (soft drinks) will now be 12 per cent, too. Goa is said to have the second-highest per capita consumption of soft drinks in India. Similarly, tax on all kinds of soaps has also been increased from 6 to 12 per cent.

Goa's special country liquor -- feni -- would be cheaper in the local market at the rate of 8 per cent sales tax, while 20 per cent would be charged outside as per the uniform tax policy guidelines. Similarly, cashew nuts and cashew kernels would be charged only 2 per cent, unlike 4 per cent outside Goa.

Goa has also exempted certain items included in the 8 per cent bracket under section 10 A of the Goa Sales Tax Act, but only for local sale. "It would help in protecting the interests of local traders, while keeping the spirit of the uniform tax policy alive," says sales tax assistant commissioner Y S Pai Bir.

The tourist state, however, is yet to raise tax to 4 per cent on information technology items.

Business