In tune with its efforts to ensure uniformity in Value Added Tax (VAT) with neighbouring states, Delhi government on Monday tabled an amendment bill in the Assembly for bringing flexibility in fixing VAT on liquor, tobacco, aerated drinks and certain other items.
The government said the bill will make enabling provisions for levy of VAT in respect of goods enlisted in the Fourth Schedule such as liquor, tobacco, aerated drinks and others - at flexible rates instead of a flat slab of 20 per cent.
The condition for bringing this provision will be such that the VAT rates on such items will have to be higher than 12.5 <g data-gr-id="31">per cent</g> which is the rate of tax applicable in respect of unspecified goods. But at the same time the rates will not be more than 30 <g data-gr-id="32">per cent</g>. Officials said the VAT Bill (2nd Amendment) is aimed at moving towards uniformity in tax rates and develop a common market to boost trade among the neighbouring states. Last month, Delhi and Punjab, Haryana and Himachal Pradesh had agreed to move towards ensuring uniformity in <g data-gr-id="34">tax</g> system.
The finance ministers of all four states had also agreed to set up a Zonal Economic Intelligence unit to check evasion of taxes.
Presenting the bill in the House, Deputy CM Manish Sisodia said that in order to remove legal deficiencies in the existing law, government aims to amend the existing VAT Act so that the tax structure could be made easier for dealers. A senior government official said that <g data-gr-id="26">government</g> needs such flexibility to implement similar tax policy with neighbouring states. The amendment bill will facilitate online filing of <g data-gr-id="24">application</g> for <g data-gr-id="25">cancellation</g> of registration. The requirement of submission of registration certificate in physical shape is also being dispensed with.
Meanwhile, reacting on the amendment, Leader of Opposition Vijender Gupta alleged that the maiden budget of Delhi government reveals a wide gap between ‘preaching and practise’ of the AAP as it has increased the expenditure on ministers by around Rs 50 lakh. He also alleged that by removing the cap of maximum VAT on items, Delhi government is pushing for <g data-gr-id="28">increase</g> in VAT from <g data-gr-id="29">back</g> door.