8216;VAT hike will not affect common man8217;

Hike in VAT will affect only those going for luxury goods and not the common man: Delhi CM

In a bid to address the concerns arising out of her recent announcement on steep hike in the value-added tax on several items,Delhi Chief Minister Sheila Dikshit has said that it will affect only those going for luxury goods and not the common man.

Dikshit said VAT on luxury items including high-end cellphones,watches and pens will be increased substantially in March when the budget for Delhi for 2010-11 fiscal will be presented,a move triggered by fund shortage due to huge spending on infrastructure projects for Commonwealth Games.

8220;I do not know what all mobiles are there above 20 lakh,or 15 lakh or 10 lakh. I would not like to touch the person who buys them for Rs 2,000 or Rs 4,000. I do not want to touch a person who buys a Rs 500 or Rs 1,000 or 2,000 rupees watch.

8220;I would not like to touch a person who buys an ordinary pen. If he buys expensive pen worth Rs 10 lakh,Rs 5 lakh then I think those people can afford to give little more,8221; the Chief Minister said in an interview.

Asked if her move will not prompt businessmen to move to next door states,she said the Government will take appropriate measures to see that businesses do not shift to from Delhi to neighbouring places.

8220;Yes,that is a definitely a challenge but I would say would you go and buy a Mont blanc pen in Gurgaon or in Faridabad when you know it is available here,8221; Dikshit said,adding that there is a category of consumers who are so rich that they don8217;t care about money but about the place they are seen shopping at.

The Government last week has increased VAT from four per cent to five per cent on 120 items,including food which will help them to mop additional resources to the tune of Rs 500 crore.

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Asked about the other items which will have increased VAT,she said her government was still going through the process of firming up the list.

8220;Look when we come to the budgets in March,thats when I will really go through it very thoroughly,8221; she said.