Chhattisgarh budget offers tax reliefs for home-grown small scale industries

NEW DELHI: Chhattisgarh chief minister Raman Singh, who also holds the finance portfolio, announced on Saturday a slew of tax relief measures for home-grown small scale industries, as he presented his maiden budget after getting elected as the chief minister of the state for the third time in a row.

While presenting a Rs 54,710 crore budget for 2014-15, Singh announced reduction of Central Sales Tax from 2% to 1% on goods manufactured by small and medium scale iron and steel industries. Also, value added tax (VAT) has been reduced from 5% to 2% on bicycle and its parts manufactured by local industries, according to a statement issued by Chhattisgarh government's finance department. Also, in order to facilitate the revival of sick industries, the stamp duty of 5%, being levied at present, will be waived off. Singh in his Budget further waived off VAT of 5 per cent on local industries that use soybean as raw material.

Singh's proposed tax reliefs for small local industries may give him political dividends too, as his party the BJP is trying to consolidate its position for the coming Lok Sabha polls. Chhattisgarh has 11 Lok Sabha seats, and the the Opposition Congress that narrowly lost the assembly poll recently, has been trying to reclaim its lost ground.

Singh, however, said tax reliefs were proposed in the backdrop of the continuing economic recession that adversely affected growth prospects of local industries, particularly small and medium scale iron and steel industries in the state.

So far as the cotton industries are concerned, VAT won't to be charged anymore on products manufactured by cottage industries that were set up by Self -Help Groups (SHGs) in the state, according to the press statement quoting major highlights of the budget.