The Jammu and Kashmir government today promised industry-friendly measures in the Budget for 2016-17 to provide an enabling business environment in the state.
"The Government would incorporate as many industry-friendly initiatives in the Budget 2016-17 as possible," state Finance Minister Haseeb Drabu said while addressing the members of Chamber of Commerce and Industries (CCI), Jammu.
The Government's endeavour is to ensure an enabling environment for the business and trade to flourish in J&K. The Finance Minister said he is a firm believer of promotion of local investment in the state. He asked industrialists and the trading community for their support and cooperation in the Government's endeavour of streamlining the system so that their major concerns could be addressed and a judicious system worked out to facilitate ease of doing business.
Responding to various issues flagged by members of CCI including delay in payment of bills at treasuries, tax audits and online system of filing returns, the Minister said that there is definite need to revamp and simplify the system and tax regime.
The Minister added that the government has also introduced a PPP model which was recently approved by the Cabinet in which system of doing work has been simplified under the Swiss Challenge Method.
Referring to delay in payments at treasuries, the minister said efforts are being made to clear all pending payments, however, he urged the trading community to ensure that any work taken up by them has the requisite budgetary approval.
With regard to frequent tax audits being conducted by the Commercial Taxes Department, the Minister said that he will ensure such audits are sparingly conducted and not used as a routine method of tax collection but to only penalise the evaders.
He also asked the trading community for their cooperation by being tax compliant.
The finance minister announced hike in certain taxes
including a 1 per cent increase in levy on all items which were earlier charged at 13.5 per cent under the VAT regime.
The list of items falling in this list has also been expanded to include cell phones, tablets, I-pads and accessories, imitation jewellery, readymade garments and hosiery goods. It also would include all types of packed, frozen food, juices and ready to serve food.
The aviation turbine fuel Levy has been hiked from 20 to 25 per cent, while the toll levied on vehicles has been increased between 8 and 15 per cent.
An entertainment duty of Rs 50 per connection per month has been levied on satellite and cable TV operators.
All online purchases made in the state will now be levied entry tax as the budget proposes to do away with the earlier threshold limit of Rs 5,000.
"The online purchases by the consumers are increasing day by day and the practice to purchase goods and services by splitting the value into bills of less than Rs 5,000 is rampant. This puts local retailers to disadvantage as the same goods and services sold by them are costlier being loaded with tax," Drabu said.
The budget proposes to extend the exemption on essential commodities, remission to local industry from payment of VAT, exemption on CST to industrial units, exemption from toll on raw material and finished products of industrial units and exemption to lodging services provided by hotels, lodges and guest houses.
Drabu also included carpet and agriculture produce under the exemption category. All types of cotton and yarn, handmade and handloom carpets were placed in the zero tax category.
VAT will not be levied on agricultural implements like thrashers, tillers and harvesters while tax exemption is proposed to be extended on Rodenticides and herbicides.
The automobiles sold at CSD canteens to the members of the Armed Forces have been placed in the 5 per cent rate of tax instead of earlier 13.5 per cent.
The VAT on parts of bicycles, tricycles, tyres and tubes of cycle rickshaws has also been put in 5 per cent category.
