Following the dispute between industrial associations, the Punjab government has stalled the decision on zero value-added tax (VAT) on cycle industry. The government will make further announcement after holding a meeting with bicycle manufacturers and taking their response.
Shiromani Akali Dal industry wing president Satish Dhanda said the government had been working for the betterment of the industry and wanted to nurture it, following that the government had decided to free the bicycle and sewing machine industry from VAT. Deputy chief minister Sukhbir Badal had made a formal announcement over the decision.
On the other hand, after the announcement United Cycle and Parts manufacturing Association (UCPMA) and Federation of Industrial Commercial Organization (FICO) had entered into a debate.
Dhanda said FICO had raised objections regarding zero VAT following that excise and taxation officers have been discussing it with industrialists. The government will make final change in tax system after taking suggestion from the industry.
UCPMA president Charanjit Singh Vishwakarma said he was in favor of zero VAT on the cycle industry. Zero VAT would be more beneficial for small-scale industry, he added.
While FICO president Gurmeet Kular said he had raised a point that with zero VAT the industry should also get relief from Central Sales Tax (CST) also. He said with the zero VAT the industry would not get Input tax Credit (ITC) on purchase of raw material.