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VAT may be lowered on certain items

THE VAT (Value-Added Tax) issue remains vexatious even after a month has elapsed sincse the new tax regime came into being in Madhya Pradesh.

india Updated: May 04, 2006 00:18 IST

THE VAT (Value-Added Tax) issue remains vexatious even after a month has elapsed sincse the new tax regime came into being in Madhya Pradesh.

In a meeting with Commercial Tax Minister Babulal Gaur in Bhopal, representatives of the food-grain merchants’ association demanded to do away with one per cent entry tax in inter-district movement of food-grains and later warned of agitation if their demand was not accepted. The minister assured to look into their demand.

The State Government even indicated of keeping VAT rate lower than fixed by the Empowered Committee on certain items. Chairing the meeting of the Cabinet Sub-committee, Babulal Gaur asked 23 delegations of traders and manufacturers from various parts of the State to ensure that benefits accruing from low tax rates due to VAT regime on some items are passed on to the consumer. 

Even if half of the states in the country impose tax lower than the one fixed by the Empowered Committee, the MP  Government would consider adopting the same.

The meeting was convened to sort out problems of the traders arising due to implementation of VAT in MP on April 1. Immediately after the VAT implementation, grain merchants complained of imposing tax on sugar. Next were the traders dealing with dry fruits. They demanded tax reduction on dry fruits from 12.5 per cent to four percent 

The major issue brought before the sub-committee today by the Chawal Dal Wholesale Dealers’ Association was related to entry tax on food-grains. 

According to the convener of the association, Motiram Wadhwani, the association has no objection to one per cent entry tax on food-grains brought into the State from outside. “Our objection is to government’s decision whereby one per cent entry tax has been imposed on inter-district movement of grains,” he said. 

Referring to the discussion in the meeting, Wadhwani said the sub-committee has assured that it would consider the issue and revoke the decision. “ If the government fails to  redress their grievance, they would go on a statewide strike”, he warned. 

Commercial Tax Principal Secretary G P Singhal told the Hindustan Times that the sub-committee took note of the grievances and issues raised by the associations.

These would be kept before the Cabinet for final decisions. The sub-committee, in addition to Gaur, comprised Finance Minister Raghavji and Transport Minister Himmat Kothari.

Apart from grain merchants, Akhil Bharatiya Udyog Vyapar Mandal, Coco-Cola Breweries, Grasim Industries, Hotline CPT, Plastic Scrap Association, MP Agricultural Equipment Manufacturing Association, Bhopal Chemist Association, Dal Mill Manufacturing Association and several others participated in the meeting.