The council has also approved the implementation of VAT from April 1 this year.

After the meeting of the council, the Chief Minister, Capt Amarinder Singh, said that the money collected by way of increase in electricity duty and stamp duty would go to the fund created to pay old-age pension etc and financial help to poor girls under Ashirawad Scheme. The increase in stamp duty would not be chargeable on the purchase or sale of agriculture land.

With the increase, the electricity duty goes up to 10 per cent on the power bills charged by the PSEB from its customers, and with the enforcing of 3 per cent increase in stamp duty, its rate would go upto 9 per cent. Besides stamp duty, people have to give 1 per cent additional fee on the deeds registered by Revenue Department. The previous SAD-BJP Government had brought down the stamp duty from 12 per cent to 6 per cent.

Talking about the package of concessions offered to the HPCL for the refinery project, Capt Amarinder Singh said that the state government would provide Rs 250 crore annually for five years as loan to the HPCL. And interest on this loan would be paid by the state government, he added. Average annual interest burden on the state for the five years would be around 100 crore, he added. He said that the SAD-BJP Government had given the sales tax deferment for 15 years to the HPCL and the total amount to be deferred was about Rs 15,000 crore during that period.

He said that by renegotiating the package, the state government had saved about Rs 13,000 crore. However, this calculation of the government seems to be on the higher side. The actual saving will be far less. But the project has been delayed for about three years. All other concessions such as exemption from ED, which were agreed upon by the SAD-BJP Government, have also been approved by the present government.

Coming to the Value Added Tax, Capt Amarinder Singh said that the state government had decided to go by the national consensus on this issue. VAT would be implemented from April 1 this year. There are certain items such as diesel, pesticides, foodgrains, fertilisers etc on which the Punjab Government has difference with the Union Government. These items have been kept out of the purview of VAT for a while. Again, discussions on these items would be held next year for reaching on agreement.

For instance, Punjab has levied 8 per cent sales tax on diesel, but in certain other states it is 20 per cent. Punjab is not prepared to raise it to 20 per cent. So, this is a point of disagreement on VAT. Likewise, Punjab avoids imposing high rate of tax on fertilisers and pesticides etc.