Tax disparity hits Mathura bitumen units

The bitumen industry of Chhata town in District Mathura of the Agra division trades in more than 30,000 tonnes of bitumen every year, converting it into products like tar felt, insulating strips, battery compound, plastic wires, road grit, and creosote oil.

There are 10 registered units, manufacturing bitumen products out of by-products of the petroleum refinery in Mathura. Currently, this industry is facing threats owing to the high rates of trade tax imposed by the UP government on bitumen and its products, compared to the neighbouring states of Haryana and Delhi, forcing the units to shift base from UP to Haryana for tax relief.

According to Virendra Khandelwal, UP territory-in-charge, Bitumen Products Manufacturers Association, and director, Krishna Tar, a company engaged in the export of coal products and heavy creosote oil, the trade tax on bitumen and bitumen products was set at 20 per cent in the state while in Haryana, barely 50 km away from Chhata, the sales tax was just 10 per cent.

He said the association had raised objections to this disparity in trade tax rates in the two states and asked the UP government to bring them in parity with the rates in Haryana.

There has not been any action on these demands, which is forcing the bitumen units of the town to move their base from Uttar Pradesh to Haryana in order to compete with the units functioning there, according to him. Already, he said five units had shut down in the town and more were on the brink of closure.

Talking to Business Standard, Maqsoor Ali, general manager, District Industrial Centre, Mathura, said bitumen units were shifting to Haryana from Chhata though he attributed it more to the low quality of sub-soil water in the town.

He said five bitumen units had shut down in the town and currently, there were only 10 units that remained functional to some extent, some of them engaged in merely upgrading the grade of the bitumen while some manufactured products like tar felt, battery compound and creosote oil.

According to Ali, there are no indications of a revision in the trade tax rates for bitumen products, though the District Industrial Centre may provide additional facilities to the bitumen units.

Taxing times

There are 10 registered units producing bitumen products in Mathura

Trade tax on bitumen is higher in UP compared with that in Haryana, Delhi

This is forcing many units to shift base to Haryana

Despite protests from units, state govt has not taken any action so far