Increase in rate of petroleum tax gets underway in Nagaland
Kohima: The newly proposed increase of rates in the petroleum sector and road maintenance cess announced by Nagaland chief minister Neiphiu Rio during the presentation of Budget 2020-2021 on Thursday, became applicable by Saturday midnight.
An official notification from the finance department, revenue branch, dated February 14, notified that in exercise of powers conferred by sub section 3 of section 3A of the Nagaland (sales of petroleum and petroleum products including motor spirit and lubricants) taxation Act, 1967 (as amended), the governor of Nagaland was pleased to notify that the rate of tax as prescribed under the entry serial number 3 & 4 of Schedule II of the Act shall stand amended.
According to the amendment, the existing rate of diesel at 10% has been raised to 14.5%; for petrol and other motor spirits, the existing rate at 20.38% has been enhanced to 25%.
It also notified that the rate of Road Maintenance Cess against entry serial number 3 & 4 of Schedule II of the Act shall stand amended. Accordingly, the existing rate of road maintenance cess per litre on petrol, diesel and motor spirits has been increased to Rs 2 per litre from the existing Rs 1.50.
It further said that the notification shall come into force with effect from the midnight of February 15. The notification was issued by chief secretary and finance commissioner Temjen Toy.
The move comes after the chief minister announced the enhanced rates during the state Assembly session which concluded on Saturday evening. Rio said that these two measures of enhancing rates in the petroleum sector is an attempt to generate additional revenue of Rs 33 crore for the state.
Saying that the state government will continue to make all possible efforts to mobilise resources, Rio had appealed all citizens to be responsible in ensuring payment of dues to the government including various taxes, so that the society can move towards better economic conditions. He added that the revenue collection system will be streamlined to enhance efficiency and increase transparency.
As reported earlier, 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 2,234.35 crore, the year is estimated to close with a negative balance of Rs 2,358.81 crore.
Besides the increase of rate for petroleum sector, the new taxes that are to be implemented within the current financial year are:
(i) One-time tax of 3% of the original cost of the vehicle to be levied for the first 10 years on heavy machinery and non-transport vehicles and equipment 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.