By raising the threshold limit for registration under VAT (value added tax) from Rs. 10 lakh to Rs. 20 lakh, the Congress has tried to enter the main bastion of the BJP — Delhi’s trading community.
A large number of small shopkeepers and traders, whose annual turnover is less than Rs. 20 lakh, now don’t need to get themselves registered with the trade and taxes department.
Delhi is considered a city of the trading class and its traders traditionally have been voting for the BJP. Sources said the government’s sops will help in softening their stance towards the Congress government.
The Delhi government’s has attempted to further simplify the process of depositing tax — from monthly to quarterly — mitigated penalties up to 80% of admitted tax and announced a composite tax scheme where work contract dealers can pay tax on their overall turnover. All these moves have been widely appreciated by traders.
Confederation of All India Traders (CAIT) welcomed the reduction of VAT on certain items but also said a large number of items of daily use are still highly taxed. “The CM has failed to streamline the working of the VAT department,” a CAIT spokesperson said.