TAX PROPOSALS IN RAJASTHAN BUDGET FOR F. Y. 2017-18
A quick review (Limited Information) of the Tax Proposals in the Rajasthan Budget for the F. Y. 2017-18. These proposals will get subsumed (to the extent applicable) in the Goods and Services Tax (GST) once it is being notified in the Year 2017-18. This document has been prepared for the ready reference and information of our clients only:-
(A) BENEFITS AND RELIEF TO MICRO & SMALL BUSINESSES
- COMPOSITION SCHEME – The government has proposed a Composition Scheme with a Tax Rate of 2% for Micro and Small MANUFACTURERS of the State having Turnover of upto Rs. 50 Lakhs during a year.
- Clarification & Relief under the CST Act is proposed in few old issues for practical reasons.
(B) AMENDMENTS UNDER WORKS CONTRACT TAX
- Contractors who have taken Exemption Certificate (EC) under the Works Contract are required to file an Amendment in the EC within a period of 60 Days, in cases where they have received additional Work/ Amount under that contract. It is proposed to give relief to such Contractors who are unable to file for extension within the prescribed period. The nature of relief will be separately notified.
- From F. Y. 2015-16, the awarder is required to file the Form 40E ONLINE. It is proposed to allow the awarder a time till 31-03-2017, to rectify any mistake in the Form 40E for the F. Y. 2015-16.
- It is proposed to extend the date of revising the return in Form VAT – 11 till 15-04-2017. This has been done to facilitate the relief in para 2 above, as the TDS certificate of a contractor is generated online on the basis of VAT 40E and consequentially on amendment in VAT 40E, the contractor will be required to amend his return accordingly.
(C) AMENDMENTS UNDER ENTRY TAX
- Government has allowed exemption from 2% Entry Tax on Yarn brought in the state of Rajasthan exclusively for the purpose of Job Work w.r.e.f 08-03-2016.
(D) AMENDMENTS UNDER ENTERTAINMENT TAX
- Exemption is being granted on the Entertainment Tax payable on the Service Charges payable on Online Booking of Cinema Tickets through Internet Service Provider for their services.
(E) OTHER MAJOR TAX PROPOSALS
- TOURISM – The Rate of tax on Aviation Turbine Fuel (ATF) for the RCS Flights within the state of Rajasthan under the Regional Connectivity Scheme (RCS) has been reduced to 1%.
- VAT ON CIGARETTES has been increased by 15%.
- No change in the Rate of VAT, CST, Entry Tax, Luxury Tax and Entertainment Tax except for additional tax on Cigarettes.
- The Government has reduced the Rate of Stamp Duty for registration of a Property Division from 5% to 3% and reduction in the Registration Fees to 0.25% or Rs. 10000/- whichever is lower.
- Reduction in the Rate of Stamp Duty for sale of property on Agreement to Sale and Power of Attorney to 0.50% and registration fees to 0.25% or Rs. 10000/- whichever is lower.
- Stamp Duty on Rent Deed is proposed to be rationalized. The Registration Fees in Rent Deeds upto 20 Years is reduced to 20% of the Stamp Duty.
- 60% and 30% relief on Stamp Duty on EWS and LIG Housing subject to fulfillment of certain conditions.
- Stamp Duty on execution of ‘Loan Document without Possession’ is 0.15%. The maximum ceiling of Stamp Duty has been reduced from Rs. 10 Lakhs to Rs. 5 Lakhs.
- Rate of Registration Fees on Family Settlement has been reduced to 0.25%.
- A ceiling of Rs. 4 Lakhs Registration Fees on purchase of Land has been granted.
- Stamp Duty on conversion of Private company, Partnership Firm or unlised public company into a Limited Liability Partnership has been reduced to 0.50% and the Registration Fees of 2% or Rs. 10000/- whichever is lower.
- Rebate on Valuation for the Stamp Duty purpose has been granted as below:-
a) Commercial Land from 100 to 500 Square Meters – 5% Rebate
b) Commercial Land exceeding 500 Square Meter – 10% Rebate
- It is proposed to waive 100% penalty and interest on deposit of outstanding Stamp Duty upto 30-04-2017.
- 100% exemption of Stamp Duty granted on transfer of Sick Micro and Small Industrial Undertakings of the State for rehabilitation under The Rajasthan MSME Policy, 2015.
(F) PROCEDURAL RELIEF AS A ROADMAP TO GST IMPLEMENTATION
The 101st Constitutional Amendment has been implemented as a result of which the VAT, Entry Tax, Luxury Tax and Entertainment Tax applicable in the state of Rajasthan will be subsumed in the unified Goods and Services Tax (GST). Following procedural reliefs have been proposed in the process of GST implementation:-
- For the F. Y. 2015-16 and subsequent years, the state government has proposed Deemed Assessment Scheme under the Assessments under VAT, Entry Tax, Luxury Tax and Entertainment Tax;
- It is proposed to give relief to Sarrafa, Gems and Stones, Petroleum Outlets and Tent Dealers who were unable to take the benefit of the Composition Scheme after opting in the scheme, due to procedural lapses.
- It is proposed to allow relief to dealers who were unable to file ONLINE appeal before the Appellate Tribunal in the past.
- The extension of the period for filling correction in the Online Declaration Forms generated by a dealer upto 2 years.