For its political gains, the SAD-BJP Government does not mind a few monetary losses. With the State staring at the 2014 lok Sabha elections, the Punjab Cabinet on Monday took a slew of decisions to woo various sections of voters including lowering VAT on steel industry by 50 per cent and on tobacco
products by 25 per cent, reducing advance tax on finished goods and property tax on residential properties, exempting city bus service from all motor vehicles taxes, among others.
Besides, the Cabinet has also gave its stamp of approval to introduce an insurance scheme — Social Security Scheme for Business community — in the state benefiting nearly 1.86 lakh dealers or businessmen.
TAX EXEMPTIONS
Criticised for imposing number of taxes recently, the state Cabinet has decided to slash the rate of VAT from 4.50 per cent to two per cent, besides reducing the advance tax on finished goods to 2.5 per cent. The rate of surcharge would remain the same, that is 10 per cent.
The scheme, estimated to result in loss of Rs200 crore approximately, is expected to lead to the revival of iron and steel industry in the State, which was on its last legs.
“By approving an economic package to revive the iron and steel industry of the state, a major relief has been given to this sector on the request of the members of the Iron and Steel Industry Association,” said a spokesperson.
Under the new scheme, Input Tax Credit (ITC) would be restricted to only two stages, which would curb bogus billing and false refunds prevalent in the industry besides differentiating between good tax payers and fraudsters.
The revival package would enable the good tax payers to trade freely besides relieving them from unhealthy competition in the industry, said the spokesperson.
Further to check the smuggling of cigarettes in the State from other parts of the country, the Cabinet also gave nod to restore tax on Cigarettes from recently hiked 50 per cent to 20.5 per cent — plus 10 per cent surcharge.
“This would help in checking sale of smuggled cigarettes, as VAT on cigarettes in adjoining States was around 20 per cent. It has been observed that increase in VAT has not resulted into less sale but such sales levels met through smuggled cigarettes,” he added.
RElIEF IN PROPERTY TAX
Cabinet also gave green signal to the State local Government department’s proposal to give 10 per cent rebate on Property Tax deposited up to March 31, 2014, instead of earlier date of December 31, 2013.
Similarly, the Cabinet also gave nod for reducing property tax rate on residential properties under rent from existing 7.5 to three per cent.
This is not all! The rate of penalty has also been reduced from 25 to 10 per cent in case of tax deposited after the due date of December 31 but before the end of financial year.
Rate of penalty has been reduced from 100 to 20 per cent in case of deposit of tax after the expiry of financial year but an interest at the rate of 18 per cent would be charged on the amount from date of end of financial year up to date of actual payment, said the spokesperson.
At places where collector rate has not been fixed separately for industrial value then market value in such cases would be considered as 75 per cent of the commercial collector rates. It has also been decided to give exemption up to Rs5,000 per annum to gallantry awardees servicemen or ex-servicemen.
SOCIAl SECURITY SCHEME FOR BUSINESS COMMUNITY
The scheme would cover 1,86,543 dealers or businessmen having turnover up to Rs1 crore, but not been covered under any other social security scheme of Punjab.
Under this scheme, three insurance covers would be extended to the beneficiaries — life insurance (accidental death and disability insurance) to provide a cover of Rs two lakh per beneficiary including accidental death and permanent or partial
disability, health insurance cover to provide a cover for meeting expenses of hospitalisation for medical procedure up to Rs50,000 per beneficiary, and Fire Insurance, a cover of Rs5 lakh per beneficiary for the losses caused due to fire would be available.
Both private and public hospitals would be empanelled to provide smart card based cashless hospitalisation to the beneficiaries. In order to provide services in an effective and efficient manner, at least one hospital would be empanelled for 1000 beneficiaries.
The State Government would be spending about Rs25 crore annually on this account as premium.
NOW, PENAlTY ON ERRING OFFICERS UNDER RTS ACT
To instill sense of promptness and responsibility, the Cabinet also okayed to promulgate an ordinance for empowering the Right to Service Commission to levy penalty on the designated officers, who fail to provide services within stipulated time period, by amending section 17(1) of the Punjab Right to Service Act 2011.
With this, the Commission would have the power to impose penalty on erring designated officers, which was earlier vested with the second appellate authority only.