No new tax was introduced while the VAT on a number of items was either reduced to 4 per cent or exempted at the Delhi Budget presented by state Finance Minister AK Walia on Thursday.

The move impacts items like LPG, coffee, ghee and footwear, that will now cost less in the Capital. Walia exempted rubber, plastic and rexine footwear with a maximum retail price of less than Rs 300 from the VAT and brought down tax rates of LPG, desi ghee and coffee from 12.5 per cent to 4 per cent.

He also exempted blood components and Deferiprove and Desferioxamine drugs used for treatment of Thalassemia from the VAT, which would bring down their prices. All hawan samagri (used in worshipping) will also be exempt.

Electrical goods, which are industrial inputs, will also be taxed at 4 per cent. The tax rate on wire mesh and metal mesh has also been reduced from 12.5 per cent to 4 per cent. Power backups and inverters will both be taxed at 4 per cent.

Bullion traders in the Capital will now have to pay tax only at 0.1 per cent, as against 1 per cent, under a composition scheme.

Walia also announced that the composition tax for the construction industry has been reduced to 3 per cent in the case of goods which are procured from outside Delhi provided no statutory forms under Central Sales Tax Act were used. In the case of goods procured from within Delhi, the composition tax has been reduced to 2.5 per cent.

A composition scheme has been started for dealers exclusively trading in drugs and medicines and having a turnover of less than Rs 1 crore (Rs 10 million). These dealers will have to pay a composition tax of 1 per cent on their total turnover.

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