Major Changes in VAT vide Haryana Budget 2016-17

State Finance Minister Capt. Abhimanyu on Monday presented Haryana Budget 2016-17 with the motto of – “Sabka Sath, Sabka Vikas”. It is second budget of Chief Minister M L Khattar led BJP government. The Budget of this year is increased by 28.4 percent to Rs. 88,781.96 as compared to previous year budget of Rs. 69,140 crore.

Rate of Tax :- No new taxes are proposed in the budget. However the tax rates are proposed to be reduced for some industries, which is expected to have beneficial impact across the sectors of the state economy. To be precise, below mentioned changes are proposed:-

  • Reduction in tax rate on footwear having MRP above Rs. 500/- from 12.5 per cent to 5 per cent and exempting shoe uppers from VAT to give boost to the footwear industry.
  • To encourage agro-based industries in the State, Tax exemption on ‘Khal’, ‘Binola’, ‘Besan’ and ‘cotton yarn manufactured in the State and Tax reduction on Vermicelli (Sewian) from 12.5 percent to 5 per cent to give incentive to industries, which use agriculture produce of the State for manufacturing.
  • To promote clean environment, tax rate reduction from 12.5 per cent to 5 per cent on sale of electrical vehicles.
  • Exemption on “Chhota Toka” (leafy vegetable cutter for kitchens) in order to provide relief to households and to encourage the Micro and Small Enterprises in the State.

Amnesty Scheme : –An ‘Amnesty Scheme’ for granting relief in respect of tax, interest, penalty and other dues to the affected registered dealers whose goods have been lost or destroyed during the reservation agitation in February 2016 is also proposed to be introduced as a relief for Violence-hit Traders.

Submit Bill, Get Prize Scheme :- To encourage the customers to obtain bills / invoices for goods purchased, the Government proposes to introduce “Submit Bill, Get Prize Scheme”. This will enhance compliance on the part of the sellers / dealers, resulting in more revenue to the State exchequer.

Real-estate sector : Deen Dayal Jan Awas Yojana is being implemented in the State to encourage the development of high-density plotted colonies with density of 240-400 persons per acre with project size of 5 to 15 acres with 65 per cent saleable area in Low and Medium Potential towns of the State, wherein small plots are made available through a liberal policy framework.

Further, the Licence fee and EDC rates have been reduced substantially, while the conversion charges & IDC stands waived off to attract developers to implement such projects in small towns. This policy shall put a check on development of unauthorised colonies on one hand and on the other it will make it possible to achieve the target of ‘Housing for All’.

The liberal and transparent New Integrated Licensing Policy (NILP) is expected to unleash a momentum of investment in real estate sector, ensuring enough supply of houses for all at economical prices. The Government has also initiated the process of Transferable Development Rights (TDR) for enabling small landowners to participate in the process of infrastructure development. The Government has also announced the Transit Oriented Development (TOD) 30 Policy providing for higher concentration of population with upgraded infrastructure around the Metro routes.

E-facilities : The State Government has started the online facility of e-Registration, e-Payment of tax and e-Filing of returns, e-tendering and issuance of C-Forms. The Government has launched e-Permits and e-Pass system for the excise licensees, to streamline the movement of liquor and to curb illegal business of it in the State.

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Untitled8Period to grant Amnesty- Extended under Haryana VAT

  • On 13-01-2016, the much awaited Amnesty Scheme for recovery of dues upto 01-April-2015 has been provided for by substituting section 59A vide Notification No. Leg. 1/2016 dated 13th January, 2016. The new section 59 A can be read as under:
  • “59A Amnesty Scheme.-
  • Notwithstanding anything to the contrary contained in this Act and rules framed thereunder, the Government may, by notification in the Official Gazette, notify amnesty scheme covering payment of tax, interest, penalty or any other dues under the Act, for the period prior to the 1st April, 2015, subject to such conditions and restrictions, as may be specified therein, covering tax, rates of tax, period of limitation, interest, penalty or any other dues payable by a class of dealers or classes of dealers or all dealers.”.

The benefit for amnesty scheme has now extended in the legislature, as prior to the substitution, the state was empowered to notify an amnesty scheme for the recovery of dues upto 01-April-2014.

  • Now, with the substitution, the benefit of amnesty scheme has been extended to recovery of dues upto 01-April-2015.
  • However, the notification granting benefit of the same to a certain class of dealers and the corresponding rules & conditions is still awaited.

Other Updates

  • No denial of Cenvat credit availed on invoices issued in the name of branch offices, which were not registered [Manipal Advertising Services Pvt. Ltd. vs. C.C.E., Mangalore (2009 (10) TMI 434 – CESTAT, BANGALORE)].
  • Central Government hereby appoints the 13th day of January, 2016 as the date on which the provisions of sub-section (5), sub-section (6) [except with respect to the manner of administration of the investor Education and Protection Fund] and sub-section (7) of section 125 of the said act shall come into force.
  • Refunds up to Rs.5,000/- and refunds in cases where arrear demand is up to Rs.5,000/- may be issued without any adjustment of outstanding arrears under section 245 of the Act during financial year 2015-2016.
  • No service tax on advance received as an earnest money for which bank guarantee of equal amount is given to the customers [Thermax Instrumentation Ltd. vs. Commissioner of Central Excise, Pune – I (2015 (12) TMI 1222 – CESTAT MUMBAI)].
  • Government of India has vide its Notification F.No. 4(19)-W&M/2014 dated 14.01.2016 announced that the Sovereign Gold Bonds, 2016 will be open for subscription from 18.01.2016 to 22.01.2016.
  • The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; Hope the information will assist you in your Professional endeavors. For query or help, contact: or call at 9555555480