THE Punjab government has clarified that the entry tax being levied on all items, except sugar, is aimed at checking evasion of valueadded tax (VAT). The tax is fully refundable on all items except sugar, he said, adding that the amount taken in the form of entry tax would be deducted from the amount a trader pays as VAT, state finance minister Manpreet Singh Badal told report-ers here.
“Imposition of entry tax on other items, barring sugar, is just shifting of the stage of VAT to evade the alleged large-scale tax evasion and ultimately, it will be adjusted against VAT but in the case of sugar, the new tax is being imposed to stop dumping of the same in Punjab from other states,” he said.
Levying tax at the entry point of the state on iron and steel, chemicals, yarns and sugar at the rate of 4 per cent similar to VAT would definitely stop the tax evasion and benefit the sugar mills, he said.
On generating more sources of revenue for the state, he said a meeting of the co-ordination committee of both the ruling alliance partners Shiromani Akali Dal (SAD) and the Bharatiya Janata Party would be held on November 28 to discuss the issue. He said the committee would review the financial health of the state. Some measures that have been identified to generate more revenue would be presented in the meeting before taking any final decision.
When asked whether the state government had deposited the Rs 292 crore as subsidy on electricity to the PSEB as announced by Chief Minister Parkash Singh Badal following the BJP’s demand to rollback the recent power tariff hike, the finance minister said: “Of course, if the chief minister has announced something, we have to abide by the same and funds will be arranged to compensate the PSEB on power tariff hike.”
Giving details of the economic position of the state, he said according to the report of the auditor general, the collection of VAT has increased by about 7 per cent during the current financial year, which is expected to increase up to 15 per cent at the end of the financial year.
The collection of excise duty has risen by Rs 200 crore in the current finan-cial year, a growth rate of about 15 per cent.
Though the collection from stamp duty decreased by 20 per cent, he said it would be made up by the end of the financial year.
Entry tax causing confusion: Experts
CHANDIGARH: The imposition of entry tax by the Punjab government on certain items, which has been made effective from November 21, has left the industry confused and even forced it to resist its implementation tooth and nail, according to industry experts. Last month, the state government had announced the imposition of 4 per cent entry tax on various items such as sugar, iron and steel, dyes and chemicals yarn in a bid to safeguard the interests of local industry and to check the leakage of tax revenue. The government’s move, which was expected to help garner Rs 30-40 crore per annum, had not only seriously affected the routine functioning of industry but had also led to an increase in prices of sugar, iron and steel in the state, an industry representative said