The assembly on Tuesday cleared the Delhi value added tax (second amendment) bill 2015, making way for the AAP-led government in the Capital to raise taxes on petroleum products, alcohol and aerated drinks.
The move aimed at increasing the city state’s revenue collection, was opposed by the BJP. Leader of opposition Vijender Gupta tore a copy of the bill and staged a walk out with the other two BJP MLAs who make up the Opposition in the state assembly.
Justifying the government’s move, Manish Sisodia clarified in the assembly that the government’s move was aimed at making VAT more flexible. “At least, we have put an upper limit. There are states where VAT is fixed at the discretion of the government. Through this flexibility we aim to end black-marketing.
In Haryana and Gujarat VAT is unlimited, in UP and Punjab the government can raise it to 50%. But we have fixed the upper limit to 30%, so that the next government does not raise it to 50% or above,” Sisodia, who is the deputy chief minister and finance minister, told the assembly.
Chief minister Arvind Kejriwal said that the amendment will not lead to inflation. The amendment will allow the government levy VAT at different rates, instead of a flat rate of 20% at which it is currently levied. The tax-rate will be higher than 12.5% but not be more than 30%. Apart from drinks and petroleum products, the same rule will apply on watches costing above Rs 5,000.
“The government has only cleared a proposal to increasing VAT. It has not been increased on anything that will affect the common man. Instead, the government has come up with proposals to ease the entire process of VAT,” Brijesh Goyal, convenor of AAP traders wing, said.
Earlier in the day, BJP MLA OP Sharma broke a microphone in the assembly after an argument over opening a university in east Delhi. Somnath Bharti moved a proposal that Sharma should pay for the damage. The Speaker referred the matter to the disciplinary committee.