VAT a mess: Maharashtra government's budget proposals are in doubt

Mumbai: Maharashtra’s finance minister Sunil Tatkare might well be forced to exclaim “VAT lagi” (I’m skewered) if the opposition insists on withdrawal of an ordinance issued last month to increase by 1% thevalue-added tax levied by the state on 97 essential commodities.

Withdrawal of the ordinance would mean Tatkare and his team would have to rework the state budget for 2010-11. The budget is scheduled to be presented next week.On Day 1 of the budget session, the opposition put the government on the mat, pointing out that the ordinance increasing the VAT rate by 1% was illegal and beyond its powers.Eknath Khadse, leader of the opposition in the assembly, said, “The state government’s power to change VAT rates expired in 2007. So, the ordinance suggesting the increase is unconstitutional.”