M A I N   N E W S

Punjab Govt to target traders, manufacturers evading vat
Jangveer Singh/TNS

The proposals

Targeting single entities which have opened four to five companies to enjoy tax exemption by showing their turnover as less than Rs 15 lakh in all companies Putting entry tax on white goods and all other items which are sold without any value addition.  Reconciling outside state  purchase bills with entry barrier challans

Cotton fabric to be taxed

After sugar, cotton fabric is also set to be taxed. A proposal has been drawn up to impose a five per cent tax on cotton fabric. Cotton attracted a four per cent purchase tax. VAT of four per cent was collected on yarn but there was no tax on fabric. Garments, however, attract a 12.5 per cent tax. Sources said as there was no tax on fabric, traders totted up bills saying they had brought cotton from outside the state and did not pay purchase tax.

Chandigarh, July 29
The Punjab Government is set to target 1.24 lakh registered manufacturers and traders, who are not paying taxes. Apart from the crackdown on tax evaders, the government, which is eagerly looking to mobilise revenue, is also planning to tax goods right from raw to finished state to mop up around Rs 4,000 crore.

A survey by the Excise and Taxation Department has revealed that 56 per cent of the 2.2 lakh registered dealers in the state do not pay any VAT (value added tax). Another 33 per cent dealers pay less than Rs 1 lakh tax, yielding only Rs 165 crore annually.

The survey revealed that around 23,400 dealers who constitute 11 per cent of the total dealers pay VAT between Rs 1 lakh and Rs 1 crore, yielding Rs 1,647 crore annually. Only 753 people pay tax between Rs 1 crore and Rs 25 crore, resulting in a collection of Rs 3,280 crore.

As many as 35 persons paying tax between Rs 25 crore and Rs 100 crore deposit Rs 1,485 crore in VAT. A total of six entities deposit 40 per cent of the complete VAT collected in the state by depositing Rs 4,000 crore annually. VAT collection last year was Rs 10,491 crore.

The survey revealed that oil sector PSUs, food grain corporations, large motor dealers, cement manufacturers, electronic companies, FMCG companies, bottlers and tyre manufacturers were paying more than 50 per cent of the total VAT collected.

The major leakage was from traders and electronic manufacturers.

Tax deposits from Ludhiana, which happens to be the financial capital of Punjab, do not commensurate with its wealth. Ludhiana, which has 55,111 dealers, accounts for only 17 per cent of the total Value Added Tax collected in the state.