IIA to push UP govt for adoption of VAT

As the entire country gets ready to embrace Value-Added-Tax (VAT) after abolishing the Central Sales Tax, industrialists in UP are worried over the possible repercussions of the state becoming economically isolated in the new tax regime.

The Agra chapter of the Indian Industries Association has now decided to raise a strong demand to the state government to adopt VAT quickly, before the state's economy was completely destroyed due to the illogical adamance of the government against the new tax regime.

IIA (Agra) Chairman Amar Mittal said the businesses and industries in UP were suffering greatly due to the lack of a far-sighted approach of the state government and if VAT was not introduced in the state soon, the remaining industrial strength of UP would be exhausted by the nearby states which have adopted VAT.

He said the local industrialists, who had already faced tremendous losses due to the tax disparities between UP and the neighbouring states, were now thinking of finally making a move out of the state, if the state government did not relent on the VAT issue.

According to Mittal, there was a section of businessmen who still thought that they were well-off without VAT but in reality, if the state continued to stick to the older tax structure, the businessmen in UP would become economically isolated as they would neither be able to import any goods from other VAT states, nor will they be able to sell their products to buyers in the VAT states.

He said the IIA would now undertake an awareness campaign to educate the state traders about the benefits of VAT instead of sticking to the trade tax system in which they were paying higher tax rates and were not getting any real benefits.

Mittal warned that unless the UP government adopted VAT, there was no chance of any new industry being setup in the state and this would eventually lead to emigration of all the industries of the state.