Besides the presentation of three new taxes to increase revenue, enhancement of rates for the petroleum sector shall come to effect on Feb 15 midnight
Kohima: Presenting the budget for the year 2020-21 on Thursady, chief minister Neiphiu Rio said that the current year’s transaction is estimated to result in a negative balance of Rs 123.96 Crore, however, with the negative opening balance of Rs 2234.35 crore, the year is estimated to close with a negative balance of Rs 2358.81 Crore.
Addressing a press briefing after the budget presentation, Rio, who is also incharge of the finance department, said that the closing deficit of the State is increasing due to reduction in the Share of Central Taxes as shown in the Union Budget by Rs 939.03 crore in the Revised Estimates.
As the shortfall in collection of taxes by the Central Government affects all States and Union Territories, the state’s total Receipt Budget for the year 2020-21 is estimated at Rs 20826.02 crore and the total Expenditure Budget is estimated at Rs. 21049.87 crore.
Rio said that the lack of adequate resources in the state has always been a problem adding that the state has a small tax base and the scope for expanding tax base is limited. Urging the requirement to enhance efficiency and transparency to increase the revenue, he proposed the following new taxes:
(i) Levy a one-time tax of 3% of the original cost of the vehicle for the first 10 years on heavy machinery and non-transport vehicles and equipments purchased within the State as well as brought into the State for commercial activities. For the next five (5) years the rate of tax shall be reduced to 1.5%. Those declared to be for exclusive personal use and agricultural tractors are exempted.
(ii) Old vehicles or machinery of the above category not registered in the State and yet to complete ten (10) years but plying in the State for commercial activities shall be required to pay a one-time tax at the rate of 3% of the original cost of the vehicle after allowing for depreciation.
(iii) Vehicles of the above category registered in other States but brought into the State for temporary commercial use shall pay Entry Fee at the rate of 1% of the original cost of the vehicle annually.
Increase of rates:-
Rio added with effect from the midnight of February 15, the following rates in the petroleum sector shall be enhanced:
(i) Duty on petroleum products is being enhanced from 10% for diesel to 14.5% and from 20.38% for petrol and other motor spirit to 25%.
(ii) Road Maintenance Cess on petroleum products is being raised from Rs. 1.50 paise per litre to Rs. 2 per litre.
Receipts and Expenditures Budget:
Out of the total receipt budget of Rs 20826.02 Cr, State’s Own tax and non-tax revenue amount to Rs 1283.36 Cr; state’s share in Central taxes at Rs 4493.37 Cr; Central Assistance (grants and loans) at Rs 8871.15 Cr; Internal Debt (including WMA from RBI) at Rs 6176.64 Cr; and recovery of loans and advances by state government at Rs 1.50 Cr.
Out of the total expenditure budget of Rs 21049.87 Cr, the non development expenditure (excluding servicing of debt) stands at Rs 8715.30 Cr; Servicinf of debt (including repayment of WMA) at Rs 6241.42 Cr; and development expenditure (including CSS etc) at Rs 6093.15 Cr.