The Delhi Cabinet on Saturday evening cleared two draft amendment Bills in an emergency meeting held here.
One of the draft amendment Bills proposes changes in the value added tax (VAT) slabs and the creation of a new 5 per cent slab and the scrapping of the 4 per cent slab.
The Centre had asked states to create a 5 per cent slab to improve their tax revenue. All items under the 4 per cent slab in the VAT Act would be put under the 5 per cent slab if the Delhi Assembly cleared the proposal in its winter session.
The Cabinet also cleared a draft amendment Bill for a change in the Entertainment and Betting Tax Act proposing a charge on all Direct to Home (DTH) television connections. Hindustan Times had reported these proposed changes on December 4 in the article ‘Life is going to get more paynful’.
“Domestic users are proposed to be charged at a rate of Rs 20 per month, while commercial connections in hotels and restaurants would be charged at Rs 50. The government hopes to raise another Rs 500 crore from this change,” said a government official, who refused to be identified, as he was not authorised to speak to the media.
The Centre had also advised all states to move luxury items like expensive cellphones, electronic items and computer equipment and softwares from the current 4 per cent slab to 12.5 per cent.
“These have been left untouched for now. There were certain other items like diesel that were getting a relaxation in VAT rates, they have also not been touched,” said the official. VAT rates on diesel might go up in the coming months.
Items under the 4 per cent slab included medicines, drugs, vaccines, syringes, edible oils, spices and condiments, products used for industrial inputs, coffee beans and seeds, all intangible goods like copyright, patent, rep license, goodwill, IT and some electronic products like computers, softwares, radios, speakers, microphones, kerosene under PDS, paper and newsprint.