With civic polls likely to be held next month in the state, SAD-BJP led Punjab government today announced to abolish its anti-tax evasion measure E-Trip system, which was a long pending demand of state's trade and industry.
Besides, the state government also exempted dealers or traders having annual turnover of less than Rs 1 crore from VAT assessement which would exempt 1.86 lakh dealers from tax assessment process.
These "industry-friendly" measures were announced by Deputy Chief Minister Sukhbir Singh Badal here today.
Announcing to abolish E-Trip (Transportation Information within Punjab), Deputy CM said from today onwards, there will be no e-trip applicable in the state.
He said it was the long pending demand of industrialists and traders as they were resisting the existing VAT collection system of Excise and Taxation Department against tax-evasion.
He described these steps as a new chapter of relationship between Punjab government and business community while addressing the gathering.
Despite stiff resistance from trade and industry, Punjab government had brought six commodities cotton, sarson (mustard), plywood, iron & steel (excluding scrap), yarn and vegetable oil (edible and non-edible) under E-Trip to check evasion in 2013.
Under this system, any dealer selling these goods within the State was required to submit information regarding the transaction on the website of the department before physical movement of the goods takes place.
Amid widespread protests and agitation against e-trip, industry had pointed out that the E-Trip system would "choke" the industrial growth, saying that it was time consuming and their data could be compromised.
The state government had introduced e-trip with an intention of curbing widespread tax evasion prevailing especially in plywood and yarn business and this measure was proposed to add additional revenue of Rs 200 to 300 crore per annum to state exchequer.
These decisions came after a series of meetings held between industry and state government.
Civil polls in Punjab are likely to be held next month.
Badal decided to abolish e-trip system by fixing rate of tax to 3.5 per cent plus 10 per cent surcharge.
As per new tax assessment policy, no case with turnover less than Rs 1 crore would be taken up for assessment thereby benefitting 1.86 lakh dealers constituting about 80 per cent of the total dealer base.
