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This is an archive article published on December 6, 2009

Value Added Tax to go up,DTH to get dearer

Following the hike in power,water,bus and Metro fares the Delhi government has decided to increase rates of Value Added Tax (VAT) on certain commodities and also bring Direct-to-Home (DTH) television connections under the Entertainment Tax net

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Following the hike in power,water,bus and Metro fares the Delhi government has decided to increase rates of Value Added Tax (VAT) on certain commodities and also bring Direct-to-Home (DTH) television connections under the Entertainment Tax net. The decision was taken during the Delhi Cabinet meeting on Saturday.

Under this,every residential DTH connection will be charged Rs 20 and commercial connections will be charged Rs 50. The Delhi government already charges Rs 20 per cable television connection,which constitutes as Entertainment Tax,and has now decided to bring DTH connections,too,under the same tax net.

Sources in the Finance ministry said the decision will also be tabled in the Delhi Assembly session,scheduled to begin

from December 9.

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Officials in the Finance ministry also said the proposal to increase VAT on certain items currently covered under the lowest 4-per cent slab was also discussed in the Cabinet meeting today and will be brought up at the Assembly session. Sources said that the decision,however,will be taken only after discussing it with the legislature.

The proposal is to increase the VAT on around 120 items which include eatables and essential goods that are currently charged at 4 per cent to 5 per cent.

Sources in the Finance ministry maintained that the decision to raise taxes is a result of the shortage of funds that has hit the Delhi government after the Sixth Pay Commission recommendations were implemented and the Commonwealth Games expenditure. Delhi Finance Minister A K Walia said,“The increase in VAT will add nearly Rs 500 crores to the government’s revenue earnings and the DTH tax will fetch the government Rs 7 crore per annum.”

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