JOIN USDikshit makes some tough calls
Citing the government’s commitment towards welfare schemes and raising funds for them, chief minister Sheila Dikshit, while imposing new taxes for the financial year 2012-13, said she was compelled to take some hard decisions.
“To build the city of our dreams, the government will need to raise resources. It is also necessary to fulfil our commitment towards vulnerable sections of the society,” she said.“This clearly imposes on us the duty to take some hard decisions that cannot be postponed,” said Dikshit.
She added that there will be more stress on focused enforcement, attention to arrears, drives against bogus registrations and fraudulent refund claims, expeditious disposal of appeals and increase in number of D-VAT audits.
Measures for checking and preventing leakages and evasion of tax revenues will also be introduced.
VAT on tobacco products
In the tax proposals, Value Added Tax (VAT) on tobacco products has been increased from 12.50 per cent to 20 per cent, and for the first time, 5 per cent VAT has been imposed on textiles costing above Rs 300.
Also, to discourage use of plastic cups, VAT has been increased from 5 per cent to 12.50 percent on this item, while 12.50 per cent VAT has been imposed on UPS systems and their parts.
“Our government is committed to discourage consumption of tobacco and tobacco products, which is a major cause of dangerous diseases,” she said.
“Last year, the government had imposed VAT at 12.50 per cent on raw tobacco, bidis and hookah tobacco. Now, I intend to raise the VAT on these products to 20 per cent,” said Dikshit.
Rasing the VAT on plastic cups and glasses, Dikshit said liberal use of these products was not only harmful to the environment but also a menace to the sewage system.
While levying VAT on UPS systems and their parts at 12.50 per cent, Dikshit said some traders were evading VAT on the sale of power inverters, which are taxable in Delhi at 12.5 per cent by reflecting the same to be sale of UPS systems in their invoices.
“The sale of UPS systems and their parts attracts VAT of only 5 per cent. To bring uniformity and clarity, I propose to levy VAT on UPS systems and their parts at 12. 50 per cent,” she added.
Levying VAT at 5 per cent on textiles, Dikshit said all kinds of textiles costing up to Rs 300 per metre, a piece of cloth set costing up to Rs 600 and sarees up to Rs 1,000 will be exempted from taxation, and all textiles above these limits will be taxed. Khadi will continue to remain exempted.