E-Paper
Traders confused over VAT
STATE?S BUSINESS community is waiting with its fingers crossed whether the much-deferred Value Added tax (VAT) would be implemented in the coming budget to be presented on February 21 in the State Assembly. The glaring omission of VAT in the Governor?s address has further compounded the traders? confusion on this count.
STATE’S BUSINESS community is waiting with its fingers crossed whether the much-deferred Value Added tax (VAT) would be implemented in the coming budget to be presented on February 21 in the State Assembly. The glaring omission of VAT in the Governor’s address has further compounded the traders’ confusion on this count.
“This Government is itself confused and creating confusion on VAT which my government had agreed to implement in April 2002,” says former chief minister Digvijay Singh.
Although the BJP’s core committee recently gave green signals to introducing VAT in the states ruled by the party, neither Chief Minister Shivraj Singh Chouhan nor Finance Minister Raghavji has made any unequivocal statement about it so far.
Therefore, the trade and service sector in the State are apprehensive about the new tax regime. The traders across the State have communicated to the Government that if VAT is to be introduced, all other existing taxes should be abolished.
“The State Government has failed to clearly communicate the structure of VAT that would be applicable in MP. Moreover, the status of other taxes is also unclear. The Finance Minister should clear confusions in the forthcoming budget,” remarked Bhopal Chamber of Commerce & Industries (BCCI) president Santosh Agarwal.
Another issue of contention is Form- 88. The trading community has strong reservation about Form-88 of the Commercial Tax department.
Federation of MP Chambers of Commerce & Industries (FMPCCI) wants the government to simplify the procedure of obtaining and submitting Form-88 in its budget.
“The traders are forced to deal with the cumbersome procedure of obtaining copies of the Form 88 from the Commercial Tax department. Forms should be available on Internet like any other form,” says secretary, FMPCCI, LC Awasthi.
Citing BJP’s manifesto, member, State Mandi Board, Rajesh Jain said the Government should bring down Mandi Tax from two to one per cent that it had promised earlier. “This is our single demand to the Finance Minister,” he added.
Other demands in the trading community’s wishlist include abrogation of the 15% surcharge imposed in the name of ‘Jabalpur earthquake relief’, lowering of stamp duty, ‘VAT tax’ (misnomer of VAT), removal of check-posts and lowering the rate of property tax on trade & industry.
“VAT tax, which has nothing to do with actual VAT, was introduced during the Digvijay regime and it is still charged on several items without any logic,” Agarwal points out.
MP State Automobile Association has urged the State Government that the rate of tax should not be hiked above 8% on two-wheelers.
“We have urged the government to keep provision in the budget for automobile showroom complex in Bhopal, considering the huge turnover in the business,” says association president Mahendra Choudhary.
Pharmaceutical distributors have suggested two per cent tax on basic drugs, instead of existing four per cent on the plea that it encourages uncalled stock transfers, resulting in revenue loss to the State.
Citing example of the Rajasthan Government, BCCI’s Agarwal said the MP Government should provide incentives to encourage trade in the State and consider traders as friends.
