AAP government plans VAT reforms to step up revenue
March, 18th 2015
The AAP government is gearing up to give shape to a series of systemic reforms aimed at streamlining Value Added Tax collection to enhance revenue in the new financial year, starting from April 1.
Chief minister Arvind Kejriwal's first day in office since his return from Bengaluru began with a quick review of the first month of AAP government and work of all cabinet ministers. Review of department of trade and taxes and discussion of reforms to plug gaps and raise revenue occupied the attention of the CM on day one.
This sets the tone for preparations for the two-day assembly session scheduled on March 23-24. The government will seek a vote on account on the Delhi budget. This will also ensure that the power and water subsidies cleared by the government continue in the new fiscal. Later in May, the government will table a full-fledged budget.
During the first round of departmental reviews after taking charge as CM, Kejriwal had made it clear that out-of-the-box thinking was required to enhance revenue collections.
The cabinet cleared a proposal to bring amendments to Delhi Value Added Tax Act 2004 last week. In the assembly session next week, the government will table a Bill on proposed amendments to ease trade conditions and tax collection procedures for making transactions more trader-friendly and enhancing revenue collections.
The VAT target for the current fiscal is Rs 18,200 crore and collections in February were around Rs 16,500 crore. A review showed that VAT collections in February were down by 5.5% when compared to the same period last year. One of the main reasons is perceived to be provisions of the VAT law resulting in unnecessary harassment to traders, sources said.
Meanwhile, the CM has added three new officers to his core team. Indian Revenue Service officer Sukesh Kumar Jain (1992 batch) has been appointed Officer on Special Duty to Kejriwal. He was a director in Central Board of Direct Taxes in the Union finance ministry.
Interestingly, the two other officers are coming on deputation from Uttar Pradesh government. They include Ghaziabad city district magistrate Kapil Singh and Moradabad ADM Praveen Mishra. The fact that Kejriwal sought officers from UP and managed to get them on deputation yet again brings back into focus the AAP government's growing discomfort over delay by the Centre in relieving Sanjiv Chaturvedi, a Haryana cadre Indian Forest Service officer currently posted as deputy secretary in AIIMS.