Delhi cuts stamp duty to 5%

Delhi Finance Minister Mahinder Singh Saathi presented on Tuesday an election Budget, postponing the implementation of the value-added tax beyond April 1.

He also reduced the entertainment tax on cinema halls by half and the stamp duty on immovable properties to 5 per cent from 8 per cent. His Budget for 2003-04 announced no new taxes.

However, non-commercial vehicles priced above Rs 400,000 will be costlier following the implementation of an ad valorem road tax structure announced on Tuesday. Saathi proposed a two-slab ad valorem basis for calculating road tax on private non-commercial vehicles under which a 2 per cent tax would be levied on vehicles costing up to Rs 400,000 and a 4 per cent tax on vehicles costing more.

The current one-time road tax is collected on the basis of the laden weight of a vehicle, and does not distinguish costlier vehicles from cheaper ones. The rationalisation of tax rates is expected to accrue an additional Rs 80 crore (Rs 800 million) to the state exchequer.

Saathi also said the entry tax on motor vehicles would be removed. He raised the taxable turnover limit for traders to Rs 500,000 from Rs 400,000 and for manufacturers to Rs 500,000 from Rs 200,000. The annual turnover bracket for the summary assessment of car dealers has been raised from Rs 1 crore (Rs 10 million ) to Rs 2 crore (Rs 20 million).

Saathi said sales tax refunds would be streamlined by the electronic clearing system.

The finance minister has proposed removing the 4 per cent sales tax on foodgrains sold in packs of less than 20 kg. He has lowered the tax on non-electronic toys from 8 per cent to 4 per cent. Non-electronic toys with maximum retail price of up to Rs 100 are completely exempt.

However, sweet-meats will be dearer with the sales tax hiked to 8 per cent from 4 per cent.

Saathi said the state was trying to make the provisions of VAT acceptable. Reiterating that Delhi would shift to the new regime soon, he ruled out implementing VAT from April 1. "The suggestions by the people at large are being incorporated in the VAT legislation. We want to learn from the experience of other states before making the shift," he said.

On the proposal for lowering stamp duty on legal instruments relating to the sale of property from 8 per cent to 5 per cent, Saathi said the Municipal Corporation of Delhi should follow suit so that the overall charges on property transactions were reduced from 13 per cent to 8 per cent.

Presenting a Rs 2,134.6 crore (Rs 21.34 billion) deficit budget, Saathi pegged the budget estimates for 2003-04 at Rs 9,800 crore (Rs 98 billion), which included Rs 5,025 crore (Rs 50.25 billion) for the Plan outlays.

Saathi has projected an 11 per cent growth in sales tax mop-up at Rs 4,400 crore (Rs 44 billion) for 2003-04, against a revised target of Rs 3,950 crore (Rs 39.5 billion) for 2002-03.

The Delhi government's revenue surplus has been pegged at Rs 2,050.04 crore (Rs 20.50 billion) in the revised estimates for the current financial year, and is estimated at Rs 2,099.63 crore (Rs 21 billion) for 2003-04.