Chandigarh, March 26
The Haryana Government has decided to partially implement the controversial value-added tax(VAT) from April 1. It has decided to retain the same rate of general sales tax as levied under the General Sales Tax Act till VAT is implemented in Delhi which is likely to implement VAT in July.
The decision has come when various trade organisations are going ahead with the preparations for a statewide bandh in protest against VAT on March 31. The call for the bandh has been given by the Haryana Pradesh Beopar Mandal(Bajrang group). The Lakshmi Chand group of the mandal has given a call for the bandh on April 1.
Under the Haryana VAT Act, the general rate of tax is 12.5 per cent, while under the existing taxation structure, it is 10 per cent. Official sources say goods exempted from sales tax at present will remain exempted under VAT also till it is implemented in Delhi.
The decision has been taken to save Haryana trade from uneven competition with traders in Delhi where the tax rate is much lower than that in Haryana. The decision has, however, failed to satisfy the business community in the state.
Mr Bajrang Garg, President of the Beopar Mandal, told TNS on the phone that nothing less than the deferment of VAT would satisfy the business community, which would go ahead with the March 31 bandh. He said the Haryana Government should implement VAT only after it was implemented in the neighbouring states of Delhi and Punjab.
He said VAT would affect not only the business community but also the poor, who would have to pay much higher tax than stipulated in the VAT Act. Rejecting the government’s proposal to charge 1 per cent of the turnover or the minimum of Rs 900 per month from those dealers whose annual turnover did not exceed Rs 25 lakh per annum, Mr Garg said the Act would push even small shopkeepers in the net of “inspector raj”. A shopkeeper having a daily sale of only Rs 285 would be covered by VAT. Under the new Act, several items like submersible pumps and low-priced shoes, which were earlier exempted from tax, had been taxed.
Official sources said it was wrong to say that sugar, textiles and tobacco would be taxed under VAT. These items would remain exempt from sales tax till the Centre amended the law relating to the imposition of additional excise duty. These items would be taxed at 4 per cent
once the excise law was amended. However, it was proposed as and when the additional excise duty on these items would be phased out, the rate of sales tax on these would be brought at par with the general rate of 12.5 per cent.
The sources, who defended VAT, said with the implementation of the new tax regime, the maximum retail price tax regime would come to an end from April 1. All dealers would be required to issue cash memos in the case of sale exceeding Rs 100. However, there was no need to show separately the amount of tax. A dealer would now pay tax after deducting the tax paid on goods purchased during a quarter from the tax collected on goods sold by him in that quarter.
Dr N.C. Jain, senior vice-president of the Haryana Chamber of Commerce and Industry, said on an experimental basis all states should make tax rate uniform and implement it for one year. If the government revenue rose to its satisfaction, it should not implement VAT, which would only lead to increased harassment of the business community by the tax authorities. He said the new system would also lead to increased paper work, which small shopkeepers would find difficult to cope with.
