Delhi Budget - All about Taxes and Industry
Updated: Jun 26, 2015 02:14:02pm
New Delhi, June 26 (KNN) Claiming that the AAP led Delhi Government believes in providing a stable tax regime, Delhi Finance Minister Manish Sisodia said the government is “not tinkering” with the tax rates, barring a few clarifications to remove ambiguity in case of a certain items.
“We do not want to alter tax rates without due thought and analysis. We are against playing to the galleries because of a tradition that Finance Ministers have raised or reduced taxes on items in the budget,” Sisodia said while presenting party’s maiden budget.
“We wish to collect and mine data, do data analytics, have mutli-level consultations and studies before proposing modifications in the rate regime,” he added.
“We are also moving towards uniform tax regime across Northern states so as to minimize the opportunities of tax arbitrage and eliminate corrupt practices. In this context, I have had successful discussions with Finance Minister of our neighbouring states who expressed the same desire,” he said.
The VAT rationalization proposals that this Government will recommend will be in line with the principle of uniformity in tax rates across neighbouring states.
Value Added Tax (VAT) is the main source of revenue for the Government. It is estimated that we shall collect Rs 24000 crore through VAT, which is 69.3 per cent of the total revenue collections of the government.
“Most of industrial inputs are taxed @ 5 per cent under Entry No. 84 of the third schedule of the Delhi Value Added Tax Act, 2004. Woods & timber are inputs for furniture,” he said.
Sisodia proposed to reduce the rate of VAT on wood & timber from 12.5 per cent to 5 per cent.
Different tax rates on an item with its variants causes ambiguity, he said proposing to bring such variants to a single rate.
Presently, waxes of different types are taxable @5 per cent, 12.5 per cent and 20 per cent under entries of Delhi Value Added Tax Act schedules. Sisodia proposed to tax wax of all kinds @ 5 per cent by suitably amending the existing entries.
Utensils of all types including pressure cookers/pans except utensils made of precious metals are currently taxable @ 5 per cent.
However, cutlery items are taxable @ 12.5 per cent. Since these items belong to the same family, it is proposed to reduce rate of tax on all utensils and cutlery items made of metals (including pressure cookers/pans) to 5 per cent except those made of precious metals, he said.
Stating that the AAP government is not proposing any enhancement in tax rates, Sisodia said that tax collection will improve with effective and efficient tax administration.
This Government is committed to simplifying the VAT structure to make it easier for the trader community to comply with the 40 DVAT Rules and Regulations, he said.
“The compliance mechanism will be made business friendly and less expensive. The rationalization exercise of the Government will be exhaustive in terms of compliances, process, and bringing in certainty in interpretation of definition of goods,” Delhi Finance Minister said.
“As committed in our poll manifesto, this Government is confident of improved tax collection by putting an end to the Raid Raj, seeking cooperation from the trader community, awareness campaigns among people, effective use of systems and processes, forward and backward linkages of trade information and prevention of tax fraud by plugging the porous areas of trade,” he added.
“Delhi is one of the few States which charges State Excise Duty at the Transport Permit Level and not at the Import Level,” he said.
To streamline the liquor trade and eradicate corruption, this Government is shifting the point of levy of Excise Duty from Transport Permit level to Import Permit level, Sisodia added.
To bring additional revenue, the Government proposes to increase the retail vend fee of Corporations from Rs 2.5 Lakh per annum to Rs 4.00 Lakh per annum and also fee of other licenses.
The unpopular Delhi Medium Liquor is proposed to be phased out during this year, he said. The Government does not intend to increase the excise duty since the same was increased last year.
Similarly, reform measures to ease renewals of Excise Licenses Hotels, Clubs and Restaurant is being done. Renewals will now not require licensees to file approvals of other departments. Renewal will be automatic and if, subsequently any violation of law is detected, the licensee will be dealt with severely.
This Government proposes to enhance the Luxury Tax from 10 per cent to 15 per cent for all applicable establishments.
He further proposed to levy an Entertainment Tax of Rs 40 on Cable TV/DTH Services. The Entertainment Tax on Cinema Halls is proposed to be enhanced from 20 per cent to 40 per cent.
Also, he proposed to increase the Betting /Totalizator Tax to 20 per cent from existing 10 per cent. (KNN Bureau)
“We do not want to alter tax rates without due thought and analysis. We are against playing to the galleries because of a tradition that Finance Ministers have raised or reduced taxes on items in the budget,” Sisodia said while presenting party’s maiden budget.
“We wish to collect and mine data, do data analytics, have mutli-level consultations and studies before proposing modifications in the rate regime,” he added.
“We are also moving towards uniform tax regime across Northern states so as to minimize the opportunities of tax arbitrage and eliminate corrupt practices. In this context, I have had successful discussions with Finance Minister of our neighbouring states who expressed the same desire,” he said.
The VAT rationalization proposals that this Government will recommend will be in line with the principle of uniformity in tax rates across neighbouring states.
Value Added Tax (VAT) is the main source of revenue for the Government. It is estimated that we shall collect Rs 24000 crore through VAT, which is 69.3 per cent of the total revenue collections of the government.
“Most of industrial inputs are taxed @ 5 per cent under Entry No. 84 of the third schedule of the Delhi Value Added Tax Act, 2004. Woods & timber are inputs for furniture,” he said.
Sisodia proposed to reduce the rate of VAT on wood & timber from 12.5 per cent to 5 per cent.
Different tax rates on an item with its variants causes ambiguity, he said proposing to bring such variants to a single rate.
Presently, waxes of different types are taxable @5 per cent, 12.5 per cent and 20 per cent under entries of Delhi Value Added Tax Act schedules. Sisodia proposed to tax wax of all kinds @ 5 per cent by suitably amending the existing entries.
Utensils of all types including pressure cookers/pans except utensils made of precious metals are currently taxable @ 5 per cent.
However, cutlery items are taxable @ 12.5 per cent. Since these items belong to the same family, it is proposed to reduce rate of tax on all utensils and cutlery items made of metals (including pressure cookers/pans) to 5 per cent except those made of precious metals, he said.
Stating that the AAP government is not proposing any enhancement in tax rates, Sisodia said that tax collection will improve with effective and efficient tax administration.
This Government is committed to simplifying the VAT structure to make it easier for the trader community to comply with the 40 DVAT Rules and Regulations, he said.
“The compliance mechanism will be made business friendly and less expensive. The rationalization exercise of the Government will be exhaustive in terms of compliances, process, and bringing in certainty in interpretation of definition of goods,” Delhi Finance Minister said.
“As committed in our poll manifesto, this Government is confident of improved tax collection by putting an end to the Raid Raj, seeking cooperation from the trader community, awareness campaigns among people, effective use of systems and processes, forward and backward linkages of trade information and prevention of tax fraud by plugging the porous areas of trade,” he added.
“Delhi is one of the few States which charges State Excise Duty at the Transport Permit Level and not at the Import Level,” he said.
To streamline the liquor trade and eradicate corruption, this Government is shifting the point of levy of Excise Duty from Transport Permit level to Import Permit level, Sisodia added.
To bring additional revenue, the Government proposes to increase the retail vend fee of Corporations from Rs 2.5 Lakh per annum to Rs 4.00 Lakh per annum and also fee of other licenses.
The unpopular Delhi Medium Liquor is proposed to be phased out during this year, he said. The Government does not intend to increase the excise duty since the same was increased last year.
Similarly, reform measures to ease renewals of Excise Licenses Hotels, Clubs and Restaurant is being done. Renewals will now not require licensees to file approvals of other departments. Renewal will be automatic and if, subsequently any violation of law is detected, the licensee will be dealt with severely.
This Government proposes to enhance the Luxury Tax from 10 per cent to 15 per cent for all applicable establishments.
He further proposed to levy an Entertainment Tax of Rs 40 on Cable TV/DTH Services. The Entertainment Tax on Cinema Halls is proposed to be enhanced from 20 per cent to 40 per cent.
Also, he proposed to increase the Betting /Totalizator Tax to 20 per cent from existing 10 per cent. (KNN Bureau)
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