The Rahat scheme -- launched more than seven months ago with the aim of increasing the cash-strapped Punjab government’s revenue by making traders who evade value-added tax (VAT) pay at least the minimum tax on lump sum basis -- is yet to achieve the desired results.
Only a few thousand traders across the state have got themselves enrolled under the scheme, which was launched in February and is aimed at covering 1.86 lakh traders. As per excise and taxation department officials, 3,138 traders got themselves enrolled by July-end. The current figure is estimated at around 5,000 as the data is yet to be updated.
Traders who opt for the scheme are exempted from inspection by excise and taxation officials. This is expected to end ‘Inspector Raj’ by checking harassment of traders.
Additional excise and taxation commissioner SDS Dhillon said since the scheme was new, it was taking time to catch the traders’ attention. He claimed that the department was encouraging traders to get themselves enrolled.
“We are making efforts to promote the scheme among traders in mandis. Our officials are holding regular meetings with them. We are hopeful that it would gain momentum sooner than later,” he said. Dhillon added that the department was also mulling taking the help of insurance agencies in attracting traders as the scheme extended insurance benefits to traders.
The scheme was launched in 74 tier-2 and tier-3 cities and towns initially. At that time, deputy chief minister Sukhbir Singh Badal had claimed that within six months, the scheme would be extended to 24 tier-1 cities. However, the plan seems to have been deferred, considering the lukewarm response in smaller cities and towns.
Catagorisation of towns
The cities/towns have been categorised into classes 1, 2 and 3, depending on the volume of business and the population. All municipal corporations and the district headquarters of Hoshiarpur are not included in any category. Class-1 cities/towns include Gurdaspur, Batala, Kapurthala, Khanna, Jagraon, Nangal, Gobindgarh, Rajpura, Nabha, Sangrur, Malerkotla, Sunam, Barnala, Kharar, Zirakpur, Dera Bassi, Mansa, Muktsar, Malout, Ferozepur, Abohar, Fazilka, Faridkot and Kotkapura. In Bathinda district, the scheme is applicable to towns such as Rampura Phul, Bhucho, Goniana, Maur, Rama, Kot Fatta and Sangat.
Why smaller towns initially?
Excise officials opine that with the scheme applicable to businesses with turnover up to Rs 1 crore per annum and a big chunk of non-taxpayers as residents, smaller towns have bigger potential than the cities.
Lump sum tax
Under the Rahat scheme, traders can opt for lump sum tax for business up to Rs 1 crore per annum as turnover. For turnover up to Rs 25 lakh, traders have to pay Rs 5,000 per year; for turnover from Rs 25-50 lakh, the total annual tax is Rs 10,000; for Rs 50-75 lakh, the tax is Rs 15,000; and for turnover of Rs 75 lakh to Rs 1 crore, traders will have to pay Rs 20,000 as lump sum tax.
The scheme extends the benefit of cashless treatment up to Rs 50,000, life and accidental insurance worth Rs 2 lakh, and Rs 5 lakh insurance in case of damage to property due to fire.