Shri Manohar Parrikar is Back”¦.as Chief Minister and Finance Minister of Goa. Finance is a subject close to his heart. He is not only creative with the avenues he taps for raising revenue for the State but also excellent with numbers. However, after taking over as the Chief Minister of Goa he had barely a week to present his first State Budget of the new Government. Also with GST on the anvil there were no substantive amendments in the State Indirect tax laws viz. Goa VAT Act, Goa Luxury Tax Act, Goa Entry Tax Act, Goa Entertainment Tax Act.

With its huge domestic and international tourist inflow and the highest per capita income in India at ₹ 2,71,793/-, Goa is a consuming State, and therefore it is estimated that State Government coffers will see a significant jump after implementation of GST. Further services play a major role in the State economy and a share of the service tax pie in GST will boost revenues. To compliment this, taxation on liquor and petroleum products which is a major source of revenue for the Goa Government will continue to be within its purview. With the expected roll out of GST on 1st July, 2017 the State Government has therefore waived off renewal fees under VAT and other Commercial taxes for all dealers except Liquor and Petroleum Product dealers.

An innovative proposal in the budget is to reimburse VAT on aviation turbine fuel in excess of 1% under a scheme to be formulated. This is being done to promote airlines to connect Goa with small towns under the Regional connectivity scheme of Government of India; which in turn will promote tourism in the State of Goa.

For the past five years the tax on motor spirit i.e. petrol has been pegged, beginning since 2002, at 0.1% and has been increased gradually in a manner to ensure that petrol price in Goa has not crossed the threshold of ₹ 60/- per litre since 2002, which is probably one of the lowest in India. As compared to this the petrol prices even in neighbouring States of Karnataka and Maharashtra range from ₹ 72/- to ₹ 76/- per litre. However this budget proposes to enhance VAT on motor spirit to 15%. Even with this increase it is estimated that the price of petrol will increase only to ₹ 65/- per litre.

To curb pollution and encourage green initiatives, VAT on electric vehicles is proposed to be exempted. On the subject of vehicles, the peak motor vehicle tax at the time of registration of vehicles was around 18%. This resulted in purchasers trying to reduce the cost of registration by registering their vehicles outside Goa, Puducherry being one of the favourite registration destinations. To encourage vehicle owners to register their vehicles in Goa the Road tax has been reduced by 4% to 5% from peak rates depending on the cost of the vehicle.

Mining of iron ore is one of the key industries in Goa. Traders in iron ore were greatly affected by denial of Input tax credit by bringing sale of mineral ore under Entry No. 9 of Schedule G (List of goods on which no Input tax credit is admissible) of Goa Vat Act since 2012. With a more effective monitoring and regulatory framework in place for mineral ore sales and export, the said Entry No. 9 of Schedule G has been deleted thus allowing for Input tax credit on sale of mineral ore.

Other significant and unique non-tax initiatives in the Budget include conducting Financial Literacy Camp and Training programmes at School level to inculcate understanding of finance related topics and banking matters in young school children, employing retired army officers and jawans for administration and security/supervision of Govt. Medical college and as Tourist security force, Initiatives towards Garbage free Goa by 2020, setting up of a Startup promotion board to encourage startups in IT sector and Making Goa the 1st Beggar free State in India by establishing a full-fledged rehabilitation centre for beggars.

And finally, on your next holiday to Goa if you find your bottle of chilled beer to be slightly more expensive by ₹ 2 to ₹ 5, it is due to the increase in excise duty on beer. But you can relax in the thought that it is much cheaper than the rest of the country!!