1 per cent transit tax in MP annulled

Differences over tax matters between Chief Minister Shivraj Singh Chauhan and former Chief Minister and current Industry Minister Babulal Gaur have created confusion over VAT and entry tax among small traders, and as a result of this, prices of some household commodities have flared up.

Gaur is busy these days in meeting trade associations, doing calculations on tax cuts. His department imposed 1 per cent entry tax on transit of pulses and rice at each district entry point in the state.

As a result, prices of both the commodities shot up by Rs 100-200 per quintal. The tax rate is 1 per cent, only at inter-state entry points, when Declaration Form 88 has been filed by the trader.

Later succumbing to pressure from traders, the decision has been withdrawn since a peeved delegation from the Madhya Pradesh Dal Chawal Vyapari Mahasangh called on Chauhan on the issue, who reportedly assured them cutting the tax to zero. A statement has been issued to abrogate the tax, but the intra-state transit will attract the tax at 1 per cent.

"The multi-point tax has been imposed on traders to harass them. We pay 1% entry tax when we cross state borders but the BJP government has imposed the tax on crossing each inter-state district border. If they have withdrawn it, we welcome the step," Motiram Wadhvani, president of the association, told Business Standard, adding, "we are awaiting a notification in this regard."

A source in the edible oil business said, "Some oil millers have been given exemption from VAT but they reclaim it from us (retailers) and consumers and hence the price of oil has also gone up by Rs 160 per quintal in the state."

Officials at commercial check posts allow sugar traders to enter the state without paying taxes. There is no monitoring on check posts, alleged the trader.

Check-posts in MP register entry of at least 1,000 trucks (with 15 ton commodity loaded on each truck) of sugar each day. Similarly oil trade touches Rs 20-50 crore mark each day. According to sources it is not less than Rs 60 lakh in a Hanuman Ganj locality of Bhopal.

"We have requested the minister (Mr Gaur) to strictly levy tax on sugar and oil if they really want to clock revenue," said Mr Wadhvani.

Similar is the case regarding VAT issue. The commercial tax minister is negotiating with various trade bodies to increase or slash taxes on certain commodities.

Recently he had raised entry tax from 1% to 9% on domestic cooking gas and justified the decision by saying that the Centre has not compensated losses incurred due to VAT.

Despite the fact that commercial tax has gone up this year by 18%, the minister and his team make false claim of revenue losses due to VAT for unknown reasons.

The state chief minister Mr Shivraj Singh has yet to find a solution to arrest the prices of household commodities, which are going up due to the confusion over taxes.