Hybrid cars, battery operated vehicles and e-rickshaws to cost much less in Delhi now.

  New Delhi: 11/05/2016

The Government of National Capital Territory (NCT) of Delhi has issued the notification reducing Value Added Tax (VAT) rates on a number of items.  Revised rates have given huge tax relief to the people of Delhi.  New rates have become effective from 10^th May, 2016.  With issue of the notification, prices of many commodities are set to fall.

Government of Delhi is committed to reduce air pollution in the city, promote health of people of Delhi and support eco-friendly modes of transport. 

To achieve this objective, the Government has reduced VAT on hybrid cars, battery operated vehicle and e-rickshaws from 12.5% to 5%.  This step apart from promoting eco-friendly vehicles to reduce pollution in the city will also bring relief to large number of entrepreneurs earning their livelihood by plying e-rickshaws. 

With reduction in VAT on hybrid vehicles, it is expected that large number of consumers will shift from petrol/diesel vehicles to hybrid vehicles thereby bringing down vehicular emission.  There will be tax rebate of lakhs of rupees to the buyers of hybrid vehicles  With reduction in  VAT on battery operated vehicles, it is expected that more players will come in the market thereby increasing availability and usage of these vehicles.

The Government of NCT of Delhi is also committed to make VAT rates in Delhi the lowest in the country.  To achieve this objective, a number of steps have been taken to rationalize the VAT rates.  In the last  financial year  VAT on Timber was reduced from 12.5% to 5%. In the current financial year, with coming into effect of new rates, the VAT on a number of commodities including marble, sweets, namkeens, school bags, footwear and readymade garments   has been reduced significantly.  General tax rate in Delhi is already low compared to other states.

The common man has got a big  tax relief with reduction of VAT on footwear from 12.5% to 5%.  Footwear costing below Rs.500 are totally exempted from VAT.  Similarly, there is another relief to the consumers with substantial reduction in VAT from 12.5% to 5% on all kinds of readymade garments.  The consumers should expect decline in prices of these commodities immediately.

The new academic session has started and the Govt. of NCT of Delhi has given a gift to the school children and their parents by reducing the VAT on school bags from 12.5 to 5%.  This is also another step in rationalizing the tax rates.  The common man has also get another tax relief through reduction of VAT on sweets and namkeens from 12.5%  to 5%.  People can also expect reduction in cost of construction of their houses as marble will now be much cheaper as the VAT has been reduced on marble also from 12.5% to 5%.  The buyers of watches can also look forward to financial savings as the VAT on watches has been reduced from 20% to 12.5%.

It is expected that reduced rate of VAT will lead to better tax compliance.  The Government appeals to the people of Delhi to help in preventing tax evasion and bringing tax evaders to the Book.  People should insist on taking bill having TIN number on each and every purchase and upload the bills through DVAT Bill App. Participation of people will  ensure that the VAT they pay to the shopkeeper actually reaches the government for development of the city.