Under Vat regime, diesel is set to be taxed at the rate of 20% from the current 12%, which would effect a hike of Rs 1.80 in its price. Also other commodities like dry fruits and steel would be taxed at the rate of 12.5%, from the current 4%.
Some of the significant highlights of tax proposals under the upcoming VAT regime (applicable from April 1, 2005) are as follows:
The threshold limit for the composition scheme, wherein a trader has to deposit tax at the rate of 1% on his turnover, has been increased to Rs 50 lakh from the earlier Rs 25 lakh.
The threshold limit for registration under VAT Act has been raised from Rs 5 lakh to Rs 10 lakh.
Rate of Vat on drugs and medicines reduced from 12.5% to 4%.
Tax on processed meat, poultry, fish and processed or preserved vegetables and fruits reduced from 12.5% to 4%.
Rate of Vat on food served in star category hotels reduced from 20% to 12.5%.
Vat on tea reduced from 12.5% to 4%.
CNG will continue to be exempted from tax under the Vat regime.
Also common salt (both processed and unprocessed) shall be exempted from levy of Vat.
Staple food items/foodgrains that have been exempted from levy of Vat include: paddy, wheat, rice and pulses.
Some of the other highlights of the Delhi government budget pertain to Delhi Metro Rail Corporation (DMRC). Delhi government has already approved the second phase of Delhi Metro and sought speedy approval from the Centre. It has kept a provision of Rs 362.57 crore in 2005-06 for the second phase.
Also with the opening of the second and third corridors of Delhi Metro by June and December 2005 respectively, it would be used by more than 20 lakh commuters daily. Delhi government has decided to release DMRCs equity share of 2005-06 amounting to Rs 107 crore in the current year itself, so as to maintain the tempo of works being done by DMRC.
Delhi government has also kept a provision of Rs 200 crore in the Annual Plan 2005-06 to initiate the preliminary works on selected projects in respect of the Commonwealth Games, to be held in Delhi in 2010.
Modern and fully built CNG propelled 200 non-AC semi-low-floor/low-floor buses will be added in the DTC fleet. Dr Walia also announced during hits budget speech that a feasibility study on the introduction of Mono Rail System in Delhi will be ready by 2005-06.
Delhi government has also decided to set up 20 fast track courts for expediting the trial of long pending sessions cases. It has also decided to establish four permanent Lok Adalats.