The Chief Minister (Finance Minister) presented the State Budget for the Year 2010-11 on Tuesday 09th March 2010 in the State assembly for the second time in his second tenure. There was not much for the trade and industry in the budget except some changes in the rate structure and the much awaited simplification of the quarterly return. The C.M. started his tax proposals with lot of simplifications and tax reduction announcements and at the end of his speech he proposed to increase the rate from 4% to 5% by stating that it has been done in most of the states and is a step forward towards implementation of GST from the coming fiscal year.
The budget is summarized in the following lines:
- A. General Proposals: –
- The C.M. started his budget speech by declaring that the Right To Information (RTI) Act would be made more transparent and effective and in the process of achieving that goal necessary amendments may be made in the statute.
- For development of basic infrastructure in the form of roads, the C.M. announced various road projects for which budget of more than Rs. 1500 Crores was allotted.
- In the speech the most emphasized area was the power and energy sector. To develop and to make the state strengthen in that area Rs. 2000 Crores were declared by the C.M. in addition to that a Biomass Policy/ Scheme 2010 was declared.
- A slab wise increase in the pension amount was proposed.
- The C.M. also took care about the threat of the global warming. In order to that he proposed to establish a Clean Development Machanism Centre.
- In order to encourage the industrial development and investment in the state new industrial policy is announced. To promote the infrastructure a new act Rajasthan Infrastructure Act is proposed.
- Urban Development Act to be made simpler and transparent.
B: Tax Proposals:
- Having the implementation of GST from the next fiscal year in mind the C.M. proposed to form a state level committee.
- Form VAT-10 is made simpler and now alongwith the challans of tax only two documents are to be enclosed. This is a welcome move and will make the return filling much more simpler.
- In order to reduce the burden of applicability of Form VAT-47 out of the list of notified 38 items 8 items are deleted.
- Clause (c ) Sub Section (1) of Section 3 has been proposed to be amended and the minimum threshold limit for registration for other than manufacturers has been proposed to be Rs. 10 Lacs.
- In continuation to previous year’s budget the C.M. has announced that now all the first appeals will be disposed off within one year.
- Considering the repeated recommendations of professionals the time limit of filling VAT Audit has been permanently extended up to 31st January.
- To provide the dealers more relief self assessment procedures are made more simpler. Now if the dealer files his annual return or the VAT Audit report, as the case may be, in time than he would be self assessed even if he has filed any of the quarterly return late.
- Other simplification is that if any dealers’ tax liability of the previous year was less than Rs. 20000/- than he is not required to file quarterly returns rather he would file only annual return.
- In the present scenario the refund of excess ITC are not given due to non verification of the same now by filling the Bank Guarantee it may be released.
- In previous assessments it is experienced that some AAs created demands for non verification of ITC adjusted against tax due. In the budget speech of the C.M. it has been announced that these demands would not be recovered until the verification of ITC claimed.
- To promote e-governance it proposed by the C.M. that the refunds of the dealers may directly be deposited in the bank account of the dealer electronically.
- Since the Year 2006-07 was the introductory year of VAT therefore, if any person filed his audit report late, he would not be penalized for the same.
- In order to promote the e-governance the CTD server would increase it’s capacity by four times.
- Earlier the date of e-filling and submitting the same to the department was same, now it has been provided that the filling of hard copy of e-return would be allowed within the time limit as prescribed.
- The requirement of filling the hard copy of the returns in which digital signature was affixed has been dispensed with.
- Tax rate changes:
||Name of Commodity
||Rate of Tax
||Water tankers, CFl bulbs, Marble chips karoji etc., Restaurants serving food,
||From 14% to 5%
||Battery operated vehicles, Solar power equipments, Atta Chakki of less than 2 H.P., Mess in institutions of less than Rs. 1500/ p.m., Mehandi cone, Bee Boxes, Rudraksh,
||Kota Stone rough
||Taxable @5% in place of weight base taxability.
17. For the relief of textile sector the doubly imposed demand of Entry Tax during the year 1999-2004 “has been withdrawn.
18. For obtaining the E.C. in case of works contractor the time limit for applying the same with penalty has been extended from one year to two years.
19. Conditional relaxation has been provided from the Entertainment Tax. Theatres which have tickets less that Rs. 50/- are exempted from tax but this applies to the movies having ‘U’ certificate from sensor board.
20. There are some reduction/ increase in one time tax paid on the two and four wheelers.
21. The rate of tax for the composition dealers has been increased from 0.25% to 0.50%.
22. Lastly the proposal which would effect the public at large and that is introduction of surcharge of Re. 0.10/- on per unit of electricity consumed in excess of 100 units per month.
CA Yashasvi Sharma
B.Com. (Hons.), LL.B., FCA