|
And
what’s further keeping the tempo high is the state
government’s decision last week to double its tax
deducted at source (TDS) on all work contracts being
executed in the state. From the existing 2 per cent TDS on
work contracts, it was decided to amend certain provisions
of the Act to increase the amount to 4 per cent. The
government is hoping to mop up an additional nearly Rs 70
crore by way of the increased TDS on work contracts.
Official
sources said this TDS will be apart from the TDS on income
tax paid by individuals. The Punjab government last year
collected about Rs 35 crore through TDS on works
contracts. With the amendment, it hopes to cross Rs 100
crore, officials say. Punjab’s VAT Secretary S.K. Mittal,
while speaking to The Indian Express today, said the
decision is an attempt to not only increase the VAT
collections, but also check VAT evasion.
“There
are works worth hundreds of crores being executed
everywhere in the state. The least we are expecting is to
double our VAT collection on this front,’’ Mittal
said. The Secretary said a contractor has to pay a
different percentage of VAT on different construction
material. “Ideally, it should average out to about 5 per
cent, but given that the TDS stood at 2 per cent, it
resulted in evasion of VAT, since the actual liability was
more,’’ he explained.
For
Punjab’s cash-starved economy, while generating
additional funds has so far been hindered for want to
requisite political will, the state government has been
busy working out ways and means to surge its tax
collections from existing revenue sources.
The
government has plans to tie up with specialists in the
trade and top consultant companies to suggest mechanisms
to plug VAT evasion rampant in Punjab. It has already held
a meeting in this connection with Price Water House, an
international chartered accountant firm. Punjab’s VAT
collection are about Rs 5,000 crore annually against the
neighbouring state of Haryana, which has Rs 7,500 crore of
VAT collections every year. Even insurgency-ridden J&K
has a VAT collection beyond 90 per cent.
Source
: Chandigarh Newsline - Chandigarh, India, dated
11/12/2007
|
