?Confused? traders threaten stir | india | Hindustan Times
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?Confused? traders threaten stir

SCORES OF seminars ahead of its implementation from April 1 have failed to clear confusion about the Value-Added Tax (VAT) system. Even as the State Government is determined to implement the new regime from Saturday, traders and industrialists seems to be still grappling with the VAT?s implications.

india Updated: Mar 31, 2006 14:40 IST

SCORES OF seminars ahead of its implementation from April 1 have failed to clear confusion about the Value-Added Tax (VAT) system. Even as the State Government is determined to implement the new regime from Saturday, traders and industrialists seems to be still grappling with the VAT’s implications.

Strongly opposing the move bring sugar under the VAT, grain merchants in the City have decided to go on an indefinite strike from April 1, if necessary amendments are not made to exempt sugar.

“In seminars Commercial Tax officials had been telling there would be no VAT on sugar, but today CT Commissioner and the minister Babulal Gaur said sugar would be taxed unlike grains which have been exempted,” lamented convener of Bhopal Kirana Vyapari Mahasangh, Motiram Wadhwani.

Citing a clause in the Empowered Committee’s report, state convener of the Akhil Bharatiya Udyog Vyapar Mandal, Anupam Agarwal pointed out that its clearly states, “VAT on additional excise duty items like sugar, textile because of initial organisational difficulties will not be imposed for one year”.

He alleged that neither Commercial Tax Minister Babulal Gaur nor higher officials of the department could clear the air even today.

Commercial Tax Commissioner P K Das said he had made it clear to representatives of the association at Indore that there would be no VAT on sugar.

“Empowered committee in its decision has stated that VAT on excise duty goods would be deferred till next year 2007 and I don’t know where the confusion arises,” he added.

However, the sugar merchants in the state opined that if sugar not exempted from VAT, it would be costlier by Rs 2 per Kg to consumers. “Presently there’s one percent entry tax on sugar and nearly 80 per cent traders evade it. What will happen if 4 per cent VAT is imposed?” asked Wadhwani. Pharmaceutical traders are equally confused over billing; whether VAT would be on MRP or prior pricing.

Traders have also accused top officials and the ministers for being unapproachable in the hour of crisis. “I failed to get in touch with the Principal Secretary, Commercial Tax, for the last two days, despite several efforts. If, I fail to make it as the representative of a chamber, what would happen to small traders?” asked president, Bhopal Chamber of Commerce & Industry, Santosh Agarwal.

“In seminars too things are not getting cleared and even officials are unaware of the Act’s fine nuances,” he alleged. Department officials, on their part, have conducted seminars on VAT in industrial areas like Govindpura and Mandideep.

But traders and industrialists are still apprehensive about inclusion of various industrial input items in the VAT schedule.

“Input rebate is of prime concern for industries and how things would be incorporated in billing,” said president, Association of Industries, D K Jain.

Similarly, Industries Association Govindpura president Shalabh Sharma suggested that inputs components used in manufacturing of goods by large units in MP be kept at four percent slab.

“If manufacturers are taxed at 4 per cent and inputs come under 12.5 per cent, it would adversely affect SSI units,” he
pointed out.

Tax consultants opined that due to non-availability of details of the Act in market, confusion is growing. “CT department should have a cell to clear all doubts and that to in black & white,” a consultant suggested.

Keeping fingers crossed, the only way out for traders and industrialists in the state is to ‘wait & watch’ for at least a fortnight after VAT implementation.