Post-VAT, J&K industry wants sales tax to go

There is skepticism in trade and industry circles about VAT, says state Chief Secretary

Industrialists and traders of Jammu and Kashmir feel the sales tax should be rescinded if the state can no longer get round the implementation of the value-added tax (VAT).

This transpired at an interactive session between industrialists and Principal Secretary (Industries and Commerce) A Sahasranaman held yesterday at the Chamber of Commerce and Industries (CCI) office.

Chief Secretary Sudhir S Bloeria in his address said there was skepticism in trade and industry circles about VAT, and the government before implementing it wants to take a balanced view. Once implemented, it would not be possible to provide sales tax exemptions to industrialists, he added.

Addressing the gathering, Sahasranaman said, "Before implementing VAT in the state, the state government has decided to take industrialists into confidence, besides ensuring their interests are protected."

Industrialists of the Jammu region including Vikrant Kuthalia, Jugal Mengi, Satish Koul, Prem Dewan, and Vinod Sachdeva, besides other members and office-bearers of the Confederation of Indian Industry, participated.

Speaking on the occasion, Satish Koul, president, Maral Overseas Ltd, said, "Export-oriented firms are highly concerned at the introduction of VAT in the state. Since they will soon be facing free trade internationally from January 2005, they cannot take further tax burden."

"Before bringing in the VAT system in the state, the government should devise ways of protecting the interests of export-oriented units, besides detailing how such units can cope with the VAT regime," Koul added.

Expressing apprehensions about VAT, Jugal Mengi said under the new tax, exemptions should continue.

He said, "With VAT, purchases will go up and hence the government should consider some exemption on the purchase tax." "Similarly, the government should also think about service tax exemptions," Mengi added.

"The government wants to protect the interests of industrialists in the VAT regime," Bloeria said, adding, "the state has dual incentives because of the state's and the Union government's industrial policies, resulting in an investment of Rs 600 crore in the industrial sector in the past one and a half years."

Bloeria said: "Two industrial policies in the state are attracting industrialists from outside, and progress in this regard is encouraging in Bari-Brahmana and Samba."

"The government's endeavours to bring industry back on rails have started paying rich dividends. This is evident from the fact that the state government is considering proposals worth Rs 1800 crore," he added.