Kolkata, Feb 27 (IANS): More than 20,000 firms in West Bengal will go out of the purview of the value added tax (VAT) with the state government raising the threshold from Rs.5 lakh to Rs.10 lakh, Finance Minister Amit Mitra said Friday.

"I propose to increase the (annual) threshold from Rs. 5 lakhs to Rs. 10 lakhs. Due to this measure, more than 20,000 dealers who are at present required to pay VAT will now go out of the ambit of VAT," Mitra said while presenting the state budget for 2015-16 in the assembly.

He also proposed to introduce an amnesty scheme to exempt any penalties on previous accumulated tax for companies registering for the tax.

"Despite our past initiatives to bring big unregistered dealers under the tax fold, some dealers still remain outside the VAT network owing to penal provision and burden of past tax liabilities. I propose to introduce an attractive amnesty scheme for unregistered dealers," he said.

Under the initiative, companies will be able to register for the ad valorem tax based on their self-declared turnovers.

"The scheme will be open from April 1, 2015 to July 31, 2015," he said.

While the state may lose 20,000 VAT payers by implementing the revision, it may bring in new companies within the fold of the state tax.

West Bengal is also doing away with the compulsory audit certificate from the small scale industries previously required.

"The dealers with annual turnover of less than Rs.5 crore are required to file a self-audit statement. I now propose to do away with filing of self-audit statement by dealers with an annual turnover of less than Rs.10 crore," said Mitra.

The minister also said his government will grant new VAT registration within 24 hours for all online application made using a digital signature.

Furthermore, companies generating electricity from renewable sources of energy for a period of 10 years will get a 100 percent VAT refund on its entire capital investments.