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  • Entry Tax In Haryana

    Overview:

    On April 16th 2008, The Haryana State Government set into motion the Haryana Tax on Entry of Goods Into Local Areas Act, 2008, which replaced the now defunct LADT Act of 2000. The act states that all taxes collected will be amassed in a Trade Development Fund, which will be used for infrastructure development in order to ensure that goods and services move freely in and out of the state. The act also made provisions for the setting up of a body whose prime objective was to pinpoint areas that required attention and to make sure that the Trade Development Fund was utilised in an appropriate manner.

    Features of the Haryana Tax on Entry of Goods into Local Areas Act, 2008:

    The main features of the act are as follows:

    • Scope of Tax:

      The tax levied as per the act is applicable on the entry of any type of goods into Haryana, with the exception of those outlined in Schedule A. This includes any good from beyond the state borders that come into Haryana for the purpose of retail or consumption. The tax levied on these particular goods will not exceed five percent of the total cost of the goods in question.

    • Exemptions:

      As per the Act, entry tax will not be levied on those importers who bring or receive taxable goods into the state of Haryana, provided that the total value of these goods is no more than Rs 10 lakh in the space of a year. This value could differ should the State Government deem fit. However, importers who failed to make the required tax payment under the previous LADT Act will not be exempt from entry tax.

    • Deductions:

      In order to calculate the amount on which tax is to be levied over a certain period of time as per the Act, an importer can make the following deductions from his total yield over that particular period:

      • The total value or worth of goods as outlined within Schedule A
      • The total value of sugar that the importer has acquired from a localised area within the state
      • The total value of goods delivered beyond the localised area, so long as they have not been utilised or consumed
      • The total value of goods that have already been taxed previously under the stipulations of the Act
      • The total value of goods for which Value Added Tax has already been paid
      • The total value of any machinery acquired on lease for the purpose of production or manufacture of goods
      • The total value of any other goods that may be specified under the Act

    Objectives of the Haryana Trade Development Fund:

    Under section 3 of the Act, all entry tax collected on goods is to be used solely for infrastructure maintenance and establishment as well as the development and upgradation of trade and finance within the state of Haryana.

    Section 25 of the Act also outlines the following objectives to be met by the board in charge of the Haryana Trade Development Fund:

    • The development and creation of roads as well as bridges in order to provide a direct link between the market areas of the state and its industrial areas.
    • Maintenance and construction of roads connecting the industrial as well as market areas of the state to railway stations
    • Creation and upkeep of railway over-bridges
    • Ensuring that financial aid and subsidies are diverted to the concerned units
    • Development of infrastructure in order to provide utilities such as water and power to industrial units
    • Creation and upkeep of infrastructure in order to ensure the smooth flow of trade and commerce in the state
    • Diverting funds towards the development of clean surroundings in certain areas
    • Providing financial assistance to specific local and government bodies
    • Diverting funds for other projects which facilitate the development of commerce and finance as specified by the state government

    Functions of the Board:

    As per Section 26 of the Act the functions of the Board shall be as follows:

    • To ensure that tax collected under the Act are solely used for the promotion and upliftment of trade and finance within the state of Haryana
    • To earmark certain areas that are in need of infrastructure development, and to divert funds towards the same
    • To make recommendations towards specific areas to which funds are to be allotted
    • To make recommendations towards amendment of the tax rate so as to maintain adherence to the guidelines of the Act
    • To ensure that funds allocated for development do not exceed the amount of tax amassed under the Act

    Differences between the LADT Act and Haryana Entry Tax Act:

    While many of the guidelines of the Haryana Entry Tax Act mirror those of the LADT Act, there are some salient differences to be found between the two acts as outlined below:

    Parameter LADT Act Haryana Entry Tax Act
    Basis Tax levied only on those goods brought into the state of Haryana for the purpose of personal use Tax levied on the entry of those goods brought into the state from beyond its borders for the purpose of sale as well as consumption
    Tax Rate Tax rate levied as follows
    • Petroleum Based Fuels - 20%
    • Any other good - 10%
    Tax rate levied - Not more than 5% for any goods specified under the Act
    Taxable Goods All goods barring the ones outlined under Schedule A All goods included under the LADT Act barring goods such as sugarcane, cotton seed and gram
    Transfer of Tax No fund created to credit tax accumulation into All entry tax accumulated to be credited into Haryana Trade Development Fund
    Board Creation No specific board or body created to oversee the allocation of tax collected for certain objectives and purposes Regulatory board or body established under the Act to ensure that tax collections are solely used for development of trade and infrastructure
    TAX
    Forms:
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