New Delhi | Sweets, namkeens (snacks), shoes, readymade garments, watches, marble stone and electric vehicles will cost less in the national capital as the Delhi government reduced VAT on them while presenting a tax-free budget for 2016-17 with focus on education, health and transport sectors.
Deputy Chief Minister Manish Sisodia presented a Rs 46,600 crore annual budget for 2016-17, pegging plan outlay at Rs 20,600 crore, while allocating Rs 26,000 crore for non-plan expenditure. Price of some tobacco products will go up as the government decided to impose a flat VAT (Value Added Tax) of 20 per cent on all products including gutkha and bidis.
A major highlight of the budget is rationalisation of VAT structure bringing it on par with the rates prevailing in the neighbouring states. The VAT on the items, whose prices will come down, has been proposed to be brought down from 12.5 to 5 per cent with the exception of the watches on which the impost will be reduced from 20 per cent to 12 per cent.
The budget also proposed to provide drinking water to all authorised and unauthorised colonies by December 2017 through pipelines. Sisodia set aside an amount of Rs 676 crore for the purpose. This is the budget for the Aam Aadmi. The important thing of this budget is that no fresh tax has been introduced. We have not even increased any tax rates and instead taxes on a number of items have been reduced, said Chief Minister Arvind Kejriwal.
He said his government aimed to make Delhi’s VAT rates lowest in the country in the next five years and the decision to rationalise the tax structure in the budget was part of that process. In the budget, Rs 10,690 crore was earmarked for education, a rise of 8.68 per cent over last year. Of this, Rs 4,645 crore is for plan expenditure (23 per cent), highest among all the heads.
21 new school buildings have been constructed while 8,000 new classrooms are being built. It equals to the infrastructure of 200 schools. Every classroom will have CCTV cameras installed for which Rs 100 crore has been set aside, Sisodia said. The government is committed to reducing tax arbitrage and will attempt to keep a uniform rate with neighbouring states.
In several items such as sweets namkeen, watches, readymade garments, lower tax rate in neighbouring states was causing erosion in revenue. We have made efforts to remove such imbalances in our VAT structure, he said.
For its three-tier public health roadmap, the government alloted Rs 5,250 crore which forms 16 per cent of the total expenditure, against last year’s allocation of Rs 4787 crore. The transport sector emerged as another priority area with around Rs 1,735 crore being allocated. Rs 10 crore has been allotted for the construction of Aam Aadmi Canteens.
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