Delhi government has reduced Value Added Tax (VAT) on hybrid cars, battery-operated vehicles and e-rickshaws from 12.5 per cent to 5 per cent, projecting it as a step towards reducing air pollution in the city.
The reduction was one of the measures announced in the 2016-17 budget.
The revised VAT rates which will reduce the cost of a host of items including marble, sweets, ‘namkeens’, school bags, footwear and ready-made garments have come into effect following a notification issued on May 10.
The government termed it as a step towards making VAT rates in Delhi the lowest in the country.
“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. It is expected that a large number of consumers will shift from petrol or diesel vehicles to hybrid vehicles,” an official statement said.
VAT on footwear, readymade garments, school bags, sweets and ‘namkeens’ and marble stone has also been reduced from 12.5 per cent to 5 per cent while the same has been brought down to 12.5 per cent from 20 per cent in case of watches.
“It is expected that reduced rate of VAT will lead to better tax compliance. People should insist on taking bill having TIN number on each and every purchase and upload the bills through DVAT Bill App,” the statement said.