VAT to be reduced on CFLs, grocery
CHANDIGARH: With an eye on the possibility of holding general elections sooner than expected, the Punjab cabinet on Wednesday decided to slash VAT on many items including Compact Fluorescent Lamp (CFL) bulbs and provisions.
Desi ghee and sweetened milk are also among these items for which VAT has been reduced from 12.5% to 4%. Excise and Taxation officials said that the department would be losing tax worth Rs 40-50 crore by bringing down the VAT, however the move would in turn, and increase sales volumes." Cheaper CFLs would also help to save energy," they pointed out.
A press release stated that the decision to reduce VAT came after a meeting of traders of the PHD Chamber of Commerce & Industry with the CM. Among other items, VAT would be reduced on Mentha oil from 12.5% to 4% in order to promote this crop in the state. However, hing, khaskhas, magaz of all kinds, singhara, Darau kuttu, Gond katira, Kamarkas, Chasku, Anardana, Amla, ampapad, amb kutra, Isubgol, guggal, hallon, shikakai, sabudana, shora, soya, nishadar, fatkari, mushkapur, methi patta and gari burada would be kept outside the ambit of 4% VAT.
Further, cinema owners in Punjab would now have a similar exemption of entertainment tax as the one extended to multiplexes. The government is also exempting VAT on raw materials and consumable procured by or sold to Sri Harmandir Sahib and Sri Darbar Sahib, Amritsar.
In another significant change, the Cabinet has decided to levy a lump sum tax on dhaba owners at the rate of Rs 10,000 (for those with turnover between Rs 5 lakh and Rs 15 lakh), Rs 22,500 (for turnover between Rs 15 lakh and Rs 30 lakh), Rs 40,000 (for turnover between Rs 30 lakh and Rs 50 lakh), Rs 75,000 (Rs 50 lakh and Rs 1 crore) Rs 1,25000 (between Rs 1 crore and Rs 1.5 crore) and Rs 1,75000 (with turnovers between Rs 1.5 crore and Rs 2 crore).
The Cabinet also decided to amend the Punjab Agricultural Produce Markets Act, 1961 through an ordinance to extend the period from six months to two years with effect from 18.5.2007 for reconstitution of market committees by the government, thereby vesting powers for reconstitution of these committees up to 17.5.2009.
The Cabinet also approved amendment in the Punjab Entry of Goods into Local Areas Act, 2000, that would now include items like iron and steel as mentioned in Section 14 of the Central Sales Tax Act, Dyes & Chemicals, Job Work, and Shoddy and Waste yarn.