Punjab’s Deputy Chief Minister Sukhbir Singh Badal on Thursday announced a New Traders’ Policy-2013 to attract more investment and make the state as the most preferred destination for commerce and trade across the country.
While unveiling the new policy, Badal said that under the new policy, the state government has ensured the minimum interface between dealers and department to ease out the trade and one of its kind social security for the traders, besides simplifying procedures and facilitation by introducing VDS and single stage taxation.
“Being a border and landlocked state, trade has suffered a lot in the Punjab and then Congress led UPA Government has awarded tax heavens to its neighbouring hilly states,” Badal said, adding that the state government has taken a proactive step to facilitate the investors and traders and I am satisfied that we are able to build the confidence of investors and traders by leaving behind all these disadvantages.
Badal further said that for the minimum interface between dealers and department to ensure hassle free and transparent governance a single taxation system would be implemented from January 1, 2014. “We want the traders to focus on business and economic activities Instead of maintaining paper records and dealing with the Inspectors. Initially, white Goods, aerated Drinks, Karyana/ Fast Moving Consumer Goods marketed by MNCs will be covered under single stage taxation,” he said, adding that the new effective tax component will be lower than the existing effective tax component.
Cautioning the officers of Excise and Taxation Department, Mr. Badal said that any officer, how so ever senior he may be, would be immediately dismissed from service. He made it clear that there would be no other action initiated against the erring officer before dismissing him.
He said that the Punjab Government has taken three major initiatives for hassle free and timely refund of VAT, including Creation of Dedicated Refund Fund, Star Rating Scheme for fast tracking of Refunds and Online transfer of refunds into the dealers’ accounts. Mr. Badal said that a dedicated “Punjab VAT Refund Fund” has been constituted only for refunds, in which all the collections made under Advance Tax would be deposited. The Deputy Chief Minister has also announced that the entire backlog of refunds would be cleared by March 31, 2014.
To eliminate frauds in VAT refunds, Star rating system for fast tracking of funds from December 2013 would be put into action. Badal said that “We want to differentiate between good tax payers and fraudsters”. He said that fraudulent traders had made the business of claiming bogus VAT refunds without even paying any taxes to the government. Under Star rating the highest tax payer would be granted “five star” to whom the refunds would be paid within 15 days. 4, 3 and 2 star rated traders would be able to get refunds within 25, 35 and 45 days via online. It may be mention here that in the month of October, 2013, refunds worth Rs 70 crores was disbursed online into the accounts of the dealers.
The Punjab Government has also given a big relief to the Brick Kilns, Plywood, Bakery and Dhabha Owners as lump sum tax has been introduced for them. Besides that the rate of tax for ToT dealers has been reduced from 1 to 0.25 percent. To eradicate “Inspector Raj” the limit for requirement of audit by CA has also been enhanced from Rs 50 Lakhs to Rs 1 crore.
Mr. Badal said that 100 percent Online Filling of Returns and Online Payment of taxes through ICICI, HDFC, PNB, Canara Bank, Axis Bank, Kotak Mohindra and Bank of Baroda was initiated.
Taking a dig at the Congress for deliberately defaming the state regarding the fiscal health, Badal said that when SAD-BJP government came to power in 2007, VAT collection was only 6037 crore, which has been increased to 20068 crore during the tenure of SAD-BJP government in the state.
A unique VDS (Voluntary Disclosure Scheme) was also announced for those dealers who have committed certain mistakes, while submitting their returns and paying the tax but now they were willing to rectify their mistakes. Under VDS dealers would have to submit application by December 31, 2013, stating the mistake committed by him/her and undertake to deposit the correct/actual tax due along with 1.5 percent interest from the day the tax was due. ETO will calculate the tax due and inform the applicant within 30 days, who have to deposit 25 percent of the tax due plus interest within a month. The dealer may pay the balance 75% amount within another 60 days.
With the announcement of New Traders’ Policy, Punjab has also become the first state to implement the social security for traders from January 1, 2014. Traders having turn over upto Rs 1 crore would be covered under Health Insurance Scheme up to Rs 50,000 in the case of hospitalization due to accident or illness. It would cover any kind of surgeries and diseases like Heart problem, Stone, Hernia, Cancer, Kidney failure and Stroke/Paralysis. On the economic front, fire Insurance Cover of Rs 5.00 lacs would also be given in the case of natural calamities like earthquake and floods, besides riots.
For the recognition to Honest Taxpayers the Deputy Chief Minister Sukhbir Singh Badal has also honoured 198 highest tax payers from the entire state. First 10 tax payers includes Indian Oil Corporation (2367 crore), Markfed (458 ), HPCL-Mittal Energy Limited (375), Bharat Petrolium (211), Hindustan Petrolium (162), Mahindra and Mahindra Commercial Vehicle (123), TATA Motors Commercial Vehicle (120), Ambuja Cement (113), Hindutan Lever (104) and Samsung India Electronics (102 crore). Mr Badal has also announced that the awardees to participate in State & District Advisory Councils on VAT.