Delhi to slap entry tax on goods from states

the delhi government, aiming to replace sales tax by a value added tax by april 1, 2002, plans to give set-off of vat paid on inputs against central sales tax levied on the output exported from the state, levy a vatable entry tax on imports into the state, and include petroleum products within the vat chain. the delhi government also plans to give cash refunds in cases where the vat taxes to be set off against the final tax exceed the final tax. this was explained by dr r khullar, commissioner, sales tax, delhi and mr manish gupta, state s-t additional commissioner here today at a press conference. an entry tax or tax on imports would be levied on all goods imported from other states into delhi. however, this entry tax will be allowed to be set off against the vat payable on sale of the item within delhi. while the delhi government officials say that the tax is to protect businesses within the state, traders present at the conference opposed the proposal to levy an entry tax. the vat levied on inputs used to manufacture a product within the state will be allowed to be set off against cst payable on inter-state sales. of course, vat levied on inputs will also be allowed to be set off on the final vat on local sale of the final product. since cst is currently at four per cent, inter-state sales would require set off of vat levied on the inputs used in making the final product against the cst. in such a case, it is likely that the set-off amount exceeds the cst payable on the final product resulting in a refund requirement. the delhi government has decided to give the refunds in all such cases, according to sales tax officials. refunds would also be given in case of local sales where the input tax credit exceeds the final tax payable on sale, officials say. the delhi government is also planning to abolish the separate threshold limits of zero, rs 1.5 lakh, and rs 3 lakh currently prescribed for exempting importers, manufacturers and traders, respectively and prescribe a common exemption limit of between rs 5 to 15 lakh, officials said. this limit exempts persons with sales below this limit from paying sales tax. the tax rate on petroleum products is likely to remain at the current level of 20 per cent for the state. if a business uses petroleum products to manufacture another item, it would get credit of the tax paid on the petroleum products. however, it would not get the credit if it uses or burns up the fuel, i.e consumes it, in the manufacturing process, officials explained. we would, in general, give input tax credit for all business inputs such as furniture, goods transport vehicles, pens etc used for output manufacturing directly or indirectly'', says gupta. currently, delhi has sales tax rates of 0, 4, 8 and 12 per cent. the vat rates in the new regime are likely to be zero, four per cent, and a revenue neutral rate of between 10 and 12 per cent. this rnr is being concretised.

Delhi to slap entry tax on goods from states

THE DELHI government, aiming to replace sales tax by a Value Added Tax by April 1, 2002, plans to give set-off of VAT paid on inputs against Central Sales Tax levied on the output exported from the state, levy a vatable entry tax on imports into t...

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