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BHUBANESWAR: The State Government has decided to raise the rate of value added tax (VAT) on several items and slash it on some goods ahead of the winter session of the Assembly beginning December 9, during which the first supplementary budget will be placed.VAT on tobacco and its products has been raised from 13.5 per cent to 25 per cent. Similarly, there will now be 10 per cent VAT on beedi, unmanufactured tobacco and tobacco used in manufacture of beedi. Earlier, VAT was exempted on these items.VAT has also been increased from 4 per cent to 13.5 per cent on cellular phones costing more than ` 5,000 and digital still image video cameras.The State Government has, however, slashed VAT on excavator, back-hoe loader, bull dozer, glass and glass sheets, plywood, laminates, particle board, hard board, block board, medium density fibre (MDF) board, veener and insulated board. Similarly, coconut oil will cost less as VAT on the item has been slashed from 13.5 per cent to 4 per cent. VAT on barbed wire, fabricated iron and steel structurals used for plant and machineries has also been reduced from 13.5 per cent to 4 per cent. Made-up sarees won’t attract any VAT, which was earlier 4 per cent.The changes have been ushered in keeping in view the tax rates of neighbouring states and the grievances of the trade bodies dealing in these goods. The release said the change in the rate of VAT on these items will arrest diversion of trade of those commodities.The release claimed that hike in VAT rate on cellular phones and digital still image video cameras will not affect the consumers of the State as these items are sold on MRP. VAT on tobacco has been raised in order to discourage consumption, it added.
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