Initiation of tax reforms and streamlining the process of collections has earned the Delhi Government rich dividends in the past year. Chief Minister Sheila Dikshit said after her budget presentation on Wednesday that the “emphasis was on better tax collection and better compliance by both the payer and the collector”.
She said “we wanted the system to be as hassle free as possible. We have given out our experience of last year. We switched to systems which were open, electronic and computerised. All registration offices have become electronic and computer friendly and therefore the dependence on people has been reduced.’’
On the ground this has resulted in better collections, Ms. Dikshit said adding that despite the slowdown the Value Added Tax collections have increased by 21 per cent. Now, she said, the target of tax collection in 2013-14 is Rs 30,454 crore and the fiscal deficit is expected to come down from Rs 2,921 crore in 2012-13 to Rs 1,268 crore in 2013-14.
Ms. Dikshit said for better tax administration, it is proposed to keep a uniform tax period of all the dealers irrespective of their turnover and so now they will only file four returns in a year as against 12. To encourage dealers to voluntarily admit their tax liability, she said penalties of up to 80 per cent of the admitted tax would be automatically mitigated.
In a major relief to small traders, the CM also raised the threshold limit for registration under VAT from Rs.10 lakh to Rs.20 lakh and has brought a new composition scheme under which dealers would be allowed to pay a tax based on their overall turnover.