The Hindu : New Delhi News : Mukhi suggests changes in Value Added Tax

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Wednesday, Apr 18, 2007
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New Delhi

Mukhi suggests changes in Value Added Tax

Staff Reporter

NEW DELHI: The Leader of the Opposition in the Delhi Assembly, Jagdish Mukhi, on Tuesday suggested a number of changes in Value Added Tax to prevent flight of business from Delhi.

Speaking on the Delhi Budget in the Assembly, the former Minister said there was an urgent need to exempt woven labels that are put on garments by exporters from VAT as due to the 4 per cent tax here the business is fast shifting to Haryana where it is exempt from the tax.

Likewise, Dr. Mukhi said, while both industrial and automobile lubricants attract 20 per cent VAT in Delhi, the rate is 12.5 per cent in Haryana due to which many dealers now illegally do their billing from Haryana resulting in revenue loss to Delhi. He demanded that a parity by reducing the tax in Delhi so that the collections do not suffer.

Dr. Mukhi also suggested that the tax on a given item in any kind of market should be uniform. At present, he said, the rates of tax on ball bearings in machine market, auto market and tractor market were different. ``A notification is needed whereby it should be stated that whenever such a situation would arise the lowest tax rate prevailing in any of the markets would apply,'' he demanded.

Finally, the former Delhi Finance Minister pointed out that in the footwear industry while articles made of plastic and rexine are exempt from tax up to the price of Rs. 300, in neighbouring Haryana all footwear are exempt from tax up to this price irrespective of the product used in their manufacture. He demanded that Delhi follow suit to remove the disparity and make the business equally attractive here.

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