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Govt may restore 'Lucky VAT' to boost revenue
June, 14th 2016

Taking a cue from the Aam Aadmi Party (AAP) government's initiative in New Delhi to provide incentives to customers who demand bills for purchases and thus pay value-added tax (VAT) promptly, the state government is mooting a lucky draw scheme where customers -who pay VAT for each and every purchase - will be properly rewarded.

The first budget of the LDF government is likely to announce a scheme similar to 'Lucky VAT' that will ensure cash prizes for VAT payers after a lucky draw. In 2006, Thomas Isaac had introduced Lucky VAT to improve sales tax collection, but, it was scrapped after it did not yield the desired result.

However, a similar scheme launched by New Delhi deputy CM Manish Sisodia in January 2016 became an instant success thus contributing to record growth in tax collection that was reflected in the budget. The scheme, DVAT Bill, is a mobile app using which bills of purchase more than Rs 100 can be uploaded to a government server. Among those who upload bills, winners will be selected every month and prizes worth Rs 50,000 will be distributed.

While replying to queries during a Facebook live session on state's finance position last week, Isaac said that he would spend time to study in detail the scheme during his next visit to Delhi. "It is the duty of every citizen to seek bills for purchases. If each of us takes up that responsibility promptly, tax evasion can be checked effectively," Isaac said in response to a suggestion made by one of Facebook user during the programme. Isaac will be visiting Delhi this weekend to attend CPM's central committee meeting.

The LDF government has already announced a target of 20% growth in tax collection and Isaac wants to ensure that both bigwigs and small players pay tax promptly. While the government may introduce amnesty schemes for settling disputes with bigwigs who have crores of tax money as arrears, Lucky VAT will be the medium to encourage the habit of demanding bills among common man.

The Lucky VAT scheme introduced in 2006 stated that every consumer - who buys goods worth Rs 1,000 and above (which attracts VAT) - would get a scratch card that carries a maximum cash prize of Rs 1,00,000. Shop-owners were supposed to disburse scratch cards for purchases below Rs 5,000, while KSFE was authorized to provide coupons for purchases above Rs. 5,000.

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