Traders Policy brings smiles in Community

From VAT refunds to tolerating no corruption, Punjab government’s trader’s policy might as well be a trader’s heaven

Traders Policy brings smiles in Community

Punjab state government in concluding months of 2013 sought to mend its methods of trading to help the big and small traders of the state. With a vision in mind Deputy Chief Minister Sukhbir Singh Badal announced the ‘New Traders Policy- 2013’. The intention was to reduce the discrepancies in the trading sector. Badal broadcasted the policy which would attracts more investors to the state and even reduce the interference between the traders and the tax department.

Not only for the big players of the trade business the policy looked out for the budding small traders too, by giving them social security net if they pay value added tax (VAT).

Punjab back in the day had a total of 2.35 lakh traders registered with the state authorities. Out of the registered traders 46,374 paid an amount less than Rs. 1,000 annually and around 92,000 did not pay any tax. Observing these stats the government also took out a Voluntary Disclosure scheme (VDS) for the dealers who wished to make amends to wrongs done by them. In this the defaulters were allowed to deposit the actual tax due along with 1.5 percent interest. 25% of the amount was collected within a month and the rest 75% in the next 60 days. The VDS also helps the government get more finances from the trading sector.

Indian Oil Corporation was marked the highest tax paying trader with Rs. 2,367 crore. Single taxation system at manufacturing level was also introduced which would free the traders from accounting and taxation procedures. Under this the entire tax is collected at the production stage and the subsequent stages turn ‘tax free’. Badal made it clear that his government wanted to help the traders from the endless paper work and wanted them to concentrate on the business alone.

Star-rating scheme was started by the Punjab government to keep away the fraudsters who enjoyed the guaranteed VAT refunds without paying expenses to the administration. Under this landmark scheme highest tax payers would be given five-star and would receive refund in 15 days. The four, three and two star traders would get theirs in 25, 35 and 45 days respectively. If any fraudster would be found cheating the government they would be charged at the level of their rating e.g. 5 star trader who rogues would face 500 per cent penalty.

After taking out the revolutionary policy the deputy CM was strict on his department officers and made it clear that any sort of corruption will not be tolerated and the corrupt officials will be dismissed. Punjab included insurance schemes for traders in their policy and became the first state to do so. Under this, traders having turnover of up to Rs. 1 crore would have a health insurance scheme of up to Rs. 50,000. Further Rs. 5 lakh insurance cover was there to cover loss incurred by natural calamities.

Further the trader’s policy of Punjab brought with it self a method that removed the chances of corruption by inspectors. The Lump Sum Tax Proposal made the requirement of audit by a CA to Rs. 1 crore from Rs. 50 Lakh.

Exports in Punjab before the Traders policy were 28,256 crore and after the scheme was imposed it took a rise to 42,723 in 2013-14. The production of oilseeds, cotton and sugarcane were at a decline in the beginning of the decade but since 2014 has started taking vast rise.

 

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