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March 6, 2015

Tax reforms proposed in WB State Budget 2015

Tax reforms proposed in WB State Budget 2015

West Bengal Government has proposed a list of tax reforms in the Budget 2015. The measures are expected to increase compliance and simplify the process of returns and help in solving pending issues.

The State’s revenue has increased historically from Rs 21000 Crore to Rs 40,000 Crore in the current fiscal (up to January 2015). The reform measures as listed by Amit Mita, Minister of Finance, West Bengal, will increase the ease of doing businesses and provide relief to small dealers.

The reforms in the tax administration have been widely acknowledged nationally with Commercial Taxes Directorate being adjudged FIRST among all states in the CSI-Nihilent e-Governance Award, 2013-14 and National Award on e-Governance 2014-15 in ‘Excellence in Governance.’

Amit Mitra said, “These are method of incentivising people to pay taxes. If you look closely you will find that there are incentives which we have provided for people, to come within the tax net.”

Highlights of tax reforms:

  • The threshold for VAT payment has been increased from the existing Rs 5 lakh to Rs 10 lakh, which will be providing relief to 20,000 small dealers
  • The Government has introduced an attractive tax amnesty scheme (from 01/04/2015 to 31/07/2015), where unregistered dealers can register themselves under VAT and pay the past tax liabilities at a lower rate, without penalty
  • The threshold for filing CA certified audit report has been increased from a turnover of Rs 5 Crore to Rs 10 Crore; thus increasing in ease of doing business
  • Due to substantive changes in the assessment procedure and greater transparency, the number of assessments had a drop of 300% in the last 3 years from 173,588(2011-12) to 40,493(2013-14)
  • The time of VAT refunds has decreased from eight to nine months (2010-11) to just one month. The simplification in refund procedure has helped to increase the refund numbers by eight times and the quantum of refund by 14 times
  • The scope of pre-assessment refund is extended to dealers whose combined turnover of export and inter-state sales, exceeds 50% of total turnover
  • VAT registration will be granted within 24 hours of online application, made using digital signature
  • At present, Profession Tax enrolment is required for online VAT registration. The Government has proposed to integrate the online system so that a dealer can obtain both of them at a time
  • The threshold of not charging Amusement Tax has been increased for tickets with a value of  Rs 60 to Rs 100 for certain list of entertainment show