Chief Minister Tarun Gogoi, while presenting his Budget for 2008-09 today proposed abolition of Value Added Tax (VAT) from rice, pulses, atta, maida, suji and besan. He also proposed removal of VAT from onion and potato. He said in his Budget speech that this would help the common people by reducing prices of these essential items. To encourage export of tea through the ICD, Amingaon, Gogoi proposed increase in the deduction of Agricultural Income Tax for tea exported through the ICD to Rs 1 per kilogram form the existing 50 paisa. This will make Assam tea more competitive, he said in his budget speech. He also proposed reduction of Central Sales Tax (CST) to 0.25 per cent on tea sold through Guwahati Tea Auction Centre to encourage sale of tea through the Auction Centre. He also proposed increase in the exemption limit for traders under VAT from annual turnover of Rs 2 lakh to Rs 4 lakh and also to exempt such traders from payment of professional tax up to annual turnover of Rs 4 lakh. This has been done in line with the recommendations of the Tax Reforms Commission, he said in his budget speech. Gogoi also proposed slashing of the VAT rate on jute cloth and other jute products from 12.5 per cent to 4 per cent. VAT of 12.5 per cent on soya nuggets has also been proposed to be reduced to 4 per cent by Gogoi. To encourage locally manufactured transformers, he proposed reduction of VAT on these transformers to 4 per cent from the existing 12.5 per cent. Tax proposals: To compensate the loss in revenue partially, Gogoi proposed increase in tax on foreign liquor and country spirit from 24 per cent to 27 per cent. it has also proposed a cess at the rate of 20 paise per kg of green leaf purchased by the bought-leaf factories has also been proposed in the Budget. However, in his Budget speech, Gogoi argued that this cess is much lower than the rate at which established tea companies use to pay cess. He proposed raising a development fund from the revenue thus collected for development of small and marginal tea growers, welfare of tea labourers in unorganised sector and improvement of quality of Assam tea Besides, a cess rate of 3 per cent on sale of tobacco products in the State, 4 per cent VAT on sports goods, excluding footballs and volley balls, have also been proposed by Gogoi. He has proposed to keep footballs and volleyballs tax-free. An entertainment tax at the rate of Rs 25 per connection per month on direct home service (DTH) connections has been proposed in the budget. Gogoi argued that the overall impact of his proposals were revenue neutral as, he said, he was required to see that, while maintaining the forward tempo of development, "all important financial parameters like the Fiscal Deficit and Revenue Deficit remain within the limits prescribed under the Assam Fiscal Responsibility and Budget Management Act, 2005.'