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The West Bengal Assembly on Monday cleared a Finance Bill for raising levies on alcohol and tobacco-related products. Stamp duty on transfer of property as gift to family members has been raised 400 per cent from 0.5 to 2 per cent.
Though no major tax increases were proposed, the Bill is aimed at broad-basing the tax base through greater compliance, simplification of assessment procedure and imposition of stiff penal measures for non-compliance or false claim.
The Bill also seeks to bring the lifestyle segments such as hotels and restaurants under the tax net.
The Bill proposes amendments to West Bengal Entertainment and Luxuries (hotels and restaurants) Tax Act, 1972; West Bengal Sales Tax Act, 1994; and West Bengal Value Added Tax Act, 2003. The bill also proposed amendment in the Indian Stamp Act, 1899 “in its application to West Bengal.”
“The entire philosophy behind the Bill is to make tax administration simple and efficient; so as to increase the tax ambit and compliance,” the State Finance Minister, Mr Amit Mitra, told reporters at a press conference during the day.
According to Mr Mitra, following Monday's amendments; tobacco related products such as cigarettes, cigars, chewing tobacco except ‘beedi' are likely to attract the highest taxe rates.
Amendments to the West Bengal Sales Tax Act, 1994 include a hike in tax levied on foreign liquor and Indian Made Foreign Liquor (IMFL). Bottles of liquor being sold at MRP would be taxed at 27 per cent – a four percentage point rise from the existing 23 per cent. For liquor that is not being sold at MRP, tax rates have been hiked by to 50 per cent from the existing 37 per cent.
Stamp Duty Rationalisation
According to the Finance Minister, rationalisation has also been carried out in terms of stamp duty on transfer of property and shares. Stamp duty on all property and share transfers would now be 2 per cent. “As a result of this the stamp duty for transfer of property as a gift to family members has also been raised from 0.5 per cent to 2 per cent,” Mr Mitra said. A similar rationalisation on stamp duty on lease rights has also been carried out.
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