We have not increased VAT: AAP

Aam Aadmi Party (AAP) leader Raghav Chadha on Tuesday said that the party has not increased the Value Added Tax (VAT) but rather tabled an amendment bill in the Assembly for bringing flexibility in fixing VAT.

"We have reduced the penalty. We didn't say that we are increasing the VAT. We have just tabled the amendment for the flexibility of VAT department," he said.

On Monday, In tune with its efforts to ensure uniformity in Value Added Tax with neighbouring states, Delhi government  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% 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 per cent.

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 tax 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 Chief Minister Manish Sisodia said that in order to remove legal deficiencies in the existing law, government aims to amend the existing VAT Act so that tax structure could be made easier for dealers.

A senior government official said that government needs such flexibility to implement similar tax policy with neighbouring states.

The amendment bill will facilitate online filing of application for cancellation of registration. The requirement of submission of registration certificate in physical shape is also being dispensed with.

Sisodia said that the move will also increase the time limit from 15 days to 45 days for seeking security from dealers claiming refund if security deposit is felt necessary while processing and examining such refund claims.

"It will reduce the per day penalty amount from Rs 500 to Rs 200 in the event of delay by a dealer in furnishing information relating to change in the nature of business.

"Besides, the bill aims to reduce the per day penalty amount from Rs 1000 to Rs 200 in the event of delay by a dealer in furnishing information relating to closure of business," the deputy CM also said.