Govt. lifts entry tax partially

Chambers hail Karnataka Govt move to lift special entry tax
The Hindu Business Line
The Government's announcement came hours after the CII had held a press meet on Monday to express the industry's resentment at the punitive tax extended to 23 items.

CHAMBERS of commerce today heaved a sigh of relief at the Karnataka Government's decision to lift the special entry tax on some goods, which was enforced from October 1 following a Budget proposal.

The decision has been welcomed by the Confederation of Indian Industry (CII) and the Bangalore Chamber of Industry and Commerce (BCIC).

In his statement, Mr K.K. Swamy, Chairman of CII (Karnataka), said the move would go a long way in reinstating faith of industry in the Government.

The Government's announcement came hours after the CII had held a press meet on Monday to express the industry's resentment at the punitive tax extended to 23 items. Mr Swamy had said the items, which formed part of the industry's inputs would have pushed up the manufacturing cost considerably.

Karnataka would have become a high-cost manufacturing centre in the southern region, he said pointing to steep increase in taxes on cement, paints, IT hardware and software and parts of construction equipment.

Mr Swamy expressed hope that the Government would similarly address other concerns of the industry, particularly with regard to infrastructure, tax hike on diesel used for captive power generation and that of the deemed EOU.

Mr S. Chandrasekhar, President, BCIC, welcomed the State Government's response to the Chamber's plea to withdraw the special entry tax.

However, he added, the notification has caused much concern to industry since the bulk of critical commodities such as capital goods deployed for infrastructure projects and petroleum products, an essential input in manufacturing, had been left out.

"This will be a big blow, particularly, to advanced industrialised States like Karnataka where investments, new projects and expansion programmes of companies will be severely stymied.

"We are amazed that the Notification specifies that documents have to be necessarily produced at the check post which is bound to increase detention costs, leave alone traffic bottlenecks. We strongly feel that this condition is uncalled for as the dealers in any case, file this return."

BCIC appealed to the Finance Minister to review the Notification and extend the relief to all registered dealers in the interest of investment flow into the State as well as competitiveness of the existing industries vis-à-vis neighbouring States.