Punjab on Monday moved to check vehicular pollution, withdrawing proposed tax relief on old vehicles (major polluters) and slashing 75pc tax on electric vehicles to promote cleaner environment.
However, it brought tractors’ trade under the tax net by replacing the word ‘motor car’ with ‘motor vehicle’ in its finance bill and triggered fears that this essential machine for agriculture will become more expensive and hurt farmers and farming. The decision brings other vehicular dealers in tax net as well.
The bill also moved to rope in all those professional (doctors, lawyers, services), who are assessed for the income tax, under the provincial professional tax, albeit for a paltry sum of Rs200 per year.
The government repealed the Punjab Entertainment Duty Act, 1958 (X of 1958), bringing the entertainment services (cinemas, theatres, concerts, circus, sports events, races, film, fashion shows and mobile stage shows) under the purview of the Punjab Revenue Authority (PRA) with introductory zero percent without input tax adjustment. In view of the proposal to assign the subject matter of entertainment duty to the Punjab Revenue Authority (PRA), the Punjab Entertainment Duty Act, 1958 is to be repealed while amending the Punjab Sales Tax on Services Act 2012 for this purpose.
However, the government continued the ongoing tax relief worth Rs51bn on motor vehicle tax, property tax, Punjab Sales Tax on various services. It announced five percent discount on payment of tax through e-payment in the Punjab Urban Immovable Property Tax Act, 1958 for the financial year 2021-22.
Further, the tax shall be paid on a yearly basis or half-yearly basis as the assessee may choose or the such later date as the government notifies, and for financial year 2021-22, the tax shall be collected as follows, (i) in first quarter with five per cent rebate, (ii) in second quarter, the amount of annual tax without any rebate; and (iii) in third and fourth quarters, the amount of annual tax with one per cent surcharge per month on the gross payable tax.
The government has given relaxation to taxpayers through the Punjab Motor Vehicle Taxation Act, 1958 for the financial year 2021-22 by offering a discount of five percent on the e-payment system. In financial year 2021-22, the tax shall be collected as follows: in first quarter with 10pc rebate, in second quarter, the amount of annual tax without any rebate; and in third and fourth quarters, the amount of annual tax with such penalty as may be determined under the Section 9.
The government has given relief by reducing the tax rates for various service sectors and rates of sales tax on services for ten service sectors, including beauty parlours, fashion designers, architects, laundries and dry cleaners, supply of machinery, warehouse services, dress designers and rental of bulldozers.
The government also proposed expanding the scope of the reduced rate of sales tax rate of five percent on restaurants, via payments made through mobile wallets and QR (quick response) scanning. The decision is made following the result of reduced tax rate through card payment which helped in the documenting the economy as well as providing relief to the taxpayers who support documentation.