Additional Resources Mobilization (ARM)

Trasnportation is the real mover and shaker of the economy.
Trasnportation is the real mover and shaker of the economy.

I am reminded of several quotes about taxation. One of them says that, “taxes, like Mothers-in- law, are often misunderstood”. The other quote says “taxes are your contribution for living in a civilized society”. Be that as it may, no budgetary exercise can be completed without resorting to some taxation measures. However, with a few exceptions in mind, I do not intend to indulge in any substantial tax revenue raising venture for the time being.

Petrol is a commodity which is used generally by economically better off people in our society. The rate of tax on this commodity in our state is 20% with a cess of Rs.1 per litre which was fixed many years ago. The rate of taxation on this item in respect of some states goes as high as 35%. The current level of consumption in our State is over 14 crore litres. I propose to increase the cess to Rs. 3 per litre and name it as employment cess. I am sure this increase is not likely to burn a hole in the pockets of those who are consuming this commodity. This measure is likely to yield additional revenue of Rs.28 crore per annum and about Rs.18 crore in the current financial year.

Similarly, the rate of tax on diesel is 12% in our State some of the other states have gone to the extent of charging more than 20% tax on this commodity. I am conscious of the fact that this item involves a larger number of persons from the public who could be directly and indirectly affected by any increase in the rate of taxation. There is no cess on diesel. I propose to charge an employment cess of only Re. 1 per litre on diesel, which will make a marginal difference in the cost of services being made available to the beneficiaries who would be ultimately bearing the incidence of the proposed measure. The current level of consumption of this commodity is about 46 crore litres per annum. Therefore, the proposed measure is likely yield annual revenue of Rs.46 crore per annum and additional revenue of Rs. 30 crore in the current financial year.

Liquor is an area which automatically comes to mind both on account of the principles of State policy enshrined in the constitution as well as a measure to raise additional revenue. The rate of GST on liquor is currently 20%. I propose to increase the same to 25%. I will be happy in case the consumption of liquor goes down somewhat because of my proposed measure. However, it is more likely that lovers of this commodity may take the proposed measure sportingly and willingly contribute a little more to the state exchequer. As such, estimates of expected additional revenue on this account are placed at Rs.21.50 crore per annum and Rs.15 crore in the current financial years.

Nearly 1.32 crore poultry table birds are being brought from outside the state annually. They are subjected to a toll tax at Lakhanpur @ Rs.2 per bird.  If the poultry bird is reared within the state, many people shall get employed in poultry farms under self employment programme and also in cooperative sector. As adequate numbers of day old chicks are not available within the state, the poultry rearing units are also importing around 2.38 crore day old chicks which are again subjected to toll tax at Lakhnapur @ Rs.1 per chick. I have already explained that the government intends to support local production of eggs, day old chicks and poultry. As a part of the strategy, I propose to exempt import of day old chicks from payment of toll tax and increase the rate of toll tax on poultry birds from existing Rs.2 per bird to Rs.5 per kg. The net additional revenue on this account is expected to be around Rs.4 crore per annum which will be utilized for development of poultry sector within the state.

Nearly 16 lakh  sheep & goats are being imported from outside the State annually to meet the local mutton requirement. Consistent with my approach to encourage local production and discourage import of consumption goods, I propose enhancement of toll tax on sheep and goats from the existing rate of Rs.25 per head      to Rs.35 per head. This may yield additional revenue of Rs.1.60 crore annually. The proceed shall be earmarked for development of local mutton production.

Mollasses from sugar cane used to be utilized by distilleries for production of rectified spirit. A license fees of Rs.25000 is being charged for stocking mollasses. Because of its most profitable use having been in liquor industry, producers of poultry /animal feed and other dealing with molasses were also subjected to the same treatment. The existing number of licensees includes 6 poultry/animal feed producing units. It has been brought to my notice that molasses are no more being used for production of rectified spirit. As such, the original fear of diversion of molasses to distillery units is no more valid. I, therefore, propose to dispense with the compulsory licensing and con-commitant license fees levied on poultry feed and animal feed units. The item shall also be taken out from the negative list of industrial raw materials.

Arrears of Passenger Tax:

It has been brought to our notice that arrears on account of non payment of passenger tax by the transporters on non-existent commercial vehicles are mounting in the records of the Commercial Tax Department. This might have been due to the reason that the owners of the registered commercial vehicles failed to render timely information about the sale or scrapping of such vehicles. I have issued directions to the concerned authorities to write off all such arrears from their books, preferably within the current financial year after due enquiry, condoning the failure to report the sale or scrapping in time. The arrears pertaining to the period 1990 to 1997 have not been recovered so far. Neither the vehicles exist nor their owners can be easily traced. Despite announcement of Amnesty Schemes and allowing deposit of only 50% of the principal amount of arrears in easy installments, very little came to the State exchequer on this account. I would like the department to concentrate on current recoveries. Chasing the long past is futile. Hence I propose to write off all arrears for the period 1990 to 1997.

On the lines of the Dhabawallas, I announce a composition scheme for brick kiln owners under section 56 of the J&K VAT Act. The proposed measure covering 209 brick kilns in Jammu and 187 brick kilns in Kashmir shall be easier on the kiln owners. The government hopes to improve the collection through this mechanism. Details of the scheme shall be notified separately.

The aforesaid measures are expected to yield additional revenue of Rs.69 crore in the current year. An ARM, figure of Rs.100 crore has been kept in the budgetary document. I propose to attain this target by making improvements in recovery of arrears or by improved collection of current dues.


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