The Delhi Government has issued the notification reducing Value Added Tax (VAT) rates on a number of items. With this notification, the new rates have become effective from May 10. The VAT on hybrid cars, battery-operated vehicle and e-rickshaws has been reduced from 12.5 per cent to 5 per cent. Similarly, VAT on sweets and namkeen also reduced from 12.5 to 5 per cent.
This step apart from promoting eco-friendly vehicles to reduce pollution in the city will also bring relief to large number of entrepreneurs earning their livelihood by plying e-rickshaws.
According to a press statement, with reduction in VAT on hybrid vehicles, it is expected that large number of consumers will shift from petrol/diesel vehicles to hybrid vehicles thereby bringing down vehicular emission. There will be tax rebate of lakhs of rupees to the buyers of hybrid vehicles. With reduction in VAT on battery operated vehicles, it is expected that more players will come in the market thereby increasing availability and usage of these vehicles.
“To achieve this objective, a number of steps have been taken to rationalise the VAT rates. In the last financial year VAT on Timber was reduced from 12.5 per cent to 5 per cent. In the current financial year, with coming into effect of new rates, the VAT on a number of commodities including marble, sweets, namkeens, school bags, footwear and readymade garments has been reduced significantly. General tax rate in Delhi is already low compared to other States,” the Press statement said.
The common man has got a big tax relief with reduction of VAT on footwear from 12.5 to 5 per cent. Footwear costing below `500 are totally exempted from VAT. Similarly, there is another relief to the consumers with substantial reduction in VAT from 12.5 to 5 per cent on all kinds of readymade garments. The consumers should expect decline in prices of these commodities immediately.
The new academic session has started and the Delhi Government has given a gift to the school children and their parents by reducing the VAT on school bags from 12.5 to 5 percent. This is also another step in rationalising the tax rates.
The common man has also get another tax relief through reduction of VAT on sweets and namkeens from 12.5 per cent to 5 per cent. People can also expect reduction in cost of construction of their houses as marble will now be much cheaper as the VAT has been reduced on marble also from 12.5 per cent to 5 per cent. The buyers of watches can also look forward to financial savings as the VAT on watches has been reduced from 20 per cent to 12.5 per cent.