NEW DELHI: The government has provided relief to small traders in the city by simplifying value added tax (VAT) procedures. On Saturday, chief minister Arvind Kejriwal met representatives of various market organizations and announced that they would dispense with the cumbersome Audit Report 1 as the first step.

Kejriwal, who called the AR1 “a lengthy and unproductive report running into multiple pages”, said the procedure was mandatory for traders with an annual turnover exceeding Rs 10 crore. “In the previous regime, VAT authorities had prescribed this separate procedure, which was causing hardship. We will scrap it,” he said.

The government has also raised the ceiling—from Rs 50 lakh to Rs 1 crore—for availing of a simplified procedure by small dealers. Traders with a turnover of up to Rs 1 crore can benefit from this and pay 1% tax on their turnover.

Sources said the government will examine how far it could raise the ceiling to exempt small traders from VAT registration. Traders with a turnover of less than Rs 20 lakh do not need to register with VAT authorities.

The government aims to reduce the human interface between VAT authorities and traders. The CM told traders that the government plans to discourage random visits by VAT inspectors to markets and trade organizations. “We are working on simplification of VAT procedures by putting in place an effective and user-friendly system. This will help traders in paying tax regularly and without hassle, and also the government in increasing its revenue,” said a source.