Sunday, February 2, 2014

Arvind Kejriwal announces easy VAT procedure for Delhi's traders

In the run-up to the Lok Sabha elections, the Aam Aadmi Party (AAP) seems to be targeting the business community in Delhi, the BJP's traditional vote bank, with the Arvind Kejriwal government on Saturday announcing simplification of the VAT payment procedure besides a number of initiatives in favour of traders.
The move came a fortnight after the fledgling party scrapped FDI in multi-brand retail. Raising questions over the latest decision, a senior official of the Trade and Taxes department said it was good for traders but was hardly needed at a time when the government was already facing a revenue crunch.
CM Kejriwal, however, was of the view that the move will help increase revenue. "The government is working on a process to simplify the VAT procedure by putting effective and user-friendly systems in place. This will help traders pay their tax regularly and without any hassle, and will also help the government increase its revenue without causing any inconvenience to traders," Kejriwal said.
The revised revenue target for the Trade and Taxes department for the current fiscal is Rs.19,500 crore, but the department has only touched the mark of Rs.12,500 crore so far and may barely reach Rs.16,000 by Marchend, the official said.
During the last one month, the government has taken several populist decisions which may lead to revenue loss, official sources said. While the announcement of subsidy on water and power made common people happy, it cost hundreds of crores to the exchequer. Scrapping of FDI in retail also received flak from industry groups.
A senior BJP leader admitted that Kejriwal's pro-trader decisions may affect the party's prospects in the coming elections. "Traders have always supported the saffron party in the city. The Delhi government's decisions to provide relief to the community may affect the BJP's prospects in the elections," the leader said, but added that "they [businessmen] also understand AAP's gimmicks".
Saturday's announcement came after several groups of traders met the chief minister at the Secretariat. After the meeting, Kejriwal announced scrapping of the Audit Report 1 (AR1), which was mandatory for traders with an annual turnover exceeding Rs.10 crore. The report was meant to detect discrepancies in the returns and books. In many cases, the government used to get some more revenue through this exercise. "In many cases we used to find discrepancies in the accounts. I remember one case in Special Zone in which Rs.58 lakh was recovered only due to the AR 1," an official said.
Kejriwal also announced that the ceiling limit of composition scheme, for small-time traders to avail of a simplified VAT procedure, will be raised fromRs.50 lakh to Rs.1 crore. This means that traders with a turnover of up to Rs1 crore will now be eligible to get the benefit of a simplified procedure for calculating the VAT on goods sold by them.
The CM also assured traders that the government will consider by how much it can raise the ceiling to exempt small traders from VAT registration.


Source - Indiatoday

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