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Goa's delicacies to be dearer

Sandesh Prabhudesai in Panaji

With Goa adopting the uniform tax policy, tourists will now have to shell out more for cashew and coconut feni, cashew nuts and cashew kernels, panv, pastry and soft drinks.

The coastal state had earlier resisted imposing tax on some of its specialities, but the central government's threat to cut off financial assistance has compelled it to fall in line with other states.

"We have no other alternative," says chief minister Francisco Sardinha, after returning from the sixth inter-state council meeting in Delhi. He has already instructed the sales tax department officials to put up a cabinet note in this regard.

If it failed to comply with the central government's directives, it would have been deprived of at least 25 per cent of the assistance. The state has been suffering since the assistance has been cut from 85 per cent in 1987 -- when Goa was granted statehood -- to 23 per cent now.

Criticising the criterion followed in the Gadgil Mukherjee formula, Sardinha demanded at the inter-state council meeting that the loan grant ratio be upgraded to 50:50 from the existing one of 70:30, failing which small states like Goa would suffer due to limited sources of revenue-generation.

Goa had not accepted the proposal of uniform tax policy and appointed a cabinet committee to study the proposal. Based on this, Sardinha had announced tax concessions on several items, while presenting the state budget in March.

Information technology was one such sector where Sardinha had imposed no tax, stating, "IT will initiate Goa's journey on the information superhighway, hopefully without speed-breakers."

While the tourist state was also known for having the lowest sales tax of four per cent on motor vehicles in the country, it was increased by two per cent recently. However, a doubling of rates appears inevitable.

This could bring down the estimated revenue generation of Rs 3.90 billion - over 70 per cent of total generation -- as the major market for the local vehicle dealers was in the neighbouring districts of Karnataka and Maharashtra.

Though the state treasury may benefit from the increase in tax on country liquor from 8 to 20 per cent, the state government is still in a quandary over tax-free domestic cooking gas.

Besides increasing the tax bracket from 8 to 12 per cent for soft drinks and soap and two to four per cent for non-ferrous metals, sulphur, and zinc, the state is now compelled to bring all the zero per cent items under 8 per cent category. These would include coconuts, biscuits, bread, toasts, cakes and pastries, stationery items, fish twines, cane articles, earthenware and hand-made utensils.

However, the state government is considering the possibility of providing a cushion to some locally manufactured, said state finance department sources.

Business

Goa