February 28, 2015
Common man, SMEs – big gainers in West Bengal Budget 2015-16
From slashing stamp duty for properties to raising VAT exemption limits, West Bengal Finance Dr Amit Mitra took every step to woo the middle class in this year’s state budget.
Dr Mitra has reduced 1% additional stamp duty on properties that are valued between Rs 30 lakh and Rs 40 lakh. The proposed stamp duty for properties in this range will be 6% instead of 7% earlier. Industry sources say it will translate into a saving of around 14% for a buyer.
A property priced at Rs 40 lakh was earlier attracting a stamp duty of Rs 2.80 lakh. But with the new rates in place, the buyer will save Rs 40 thousands, or around 14%, on the earlier stamp duty .
Jitendra Khaitan, chief managing director of Pioneer Properties and board member of National Realtors’ Association, felt that the decision would offset service tax burden on the buyer to a large extent. “A reduction in costs always sends right signals across the industry . A saving of Rs 40,000 on stamp duty will encourage buyers,“ he said.
Dr Mitra has also tried to address concerns of the small and medium business units he had spoken to at length a month before the budget.He has increased threshold limit of VAT exemption for units with turnover of Rs 5 lakh to Rs 10 lakh.According to the finance minister, around 20,000 businessmen will now go out of the VAT ambit after the new announcement. Industry experts said the small businessmen used to get reimbursements for the VAT earlier. But with the new exemption in place, they will no more have to wait till the money is reimbursed.
Respite has also been given to business units which have turnover up to Rs 5 crore. These units will not have to hire chartered accountants any more. The state department of micro, small and medium enterprises has been running campaigns for ease of doing business in Bengal for the past six years. By bringing a large chunk of MSMEs out of the compulsory appointment of chartered accountants and promoting self-assessment, the Minister has also tried to encourage the process.
The State MSME secretary said more than 10,000 new MSME units were being registered in Bengal every year. While 60 per cent of them are in the manufacturing sector, the remaining are in the service sector. While it is difficult to quantify the units by turnover, most of these units have an investment of Rs 1 crore on an average.
Dr Mitra also tried to encourage the non-cinema entertainment industry in the state by reducing amusement tax. Events such as musical concerts, magic shows and dance will now be brought under the exemption net. Dr Mitra has proposed to enhance exemption limit from Rs 60 earlier to Rs 100.
Economist Abhirup Sarkar feels that there is little room for giving relief to the middle class in West Bengal. “In Bengal, state taxes are much below the national average. Giving further relief is a challenging task for a Finance Minister. He (Dr Mitra) has tried to create some room even in that short space,“ he said.