UP cut in entry tax on iron and steel to lower production cost

Also, cabinet decision to reduce value added tax on cigarette and cigar from 50% to 25%

Acceding to a long-standing demand of the industry, Uttar Pradesh cabinet on Tuesday approved reduction in the entry tax on iron and steel from five per cent to one per cent.

This would benefit the large number of iron and steel-based units in the industrial hubs of Ghaziabad, Kanpur and Agra.

“The reduction in entry tax would help in lowering the manufacturing cost of iron and steel products in UP and make these more cost-competitive,” Indian Industries Association (IIA) Executive Director D S Verma told Business Standard.

Industry had been demanding relief in entry tax rate and several representations had been made to the chief minister and the state tax and industries departments.

“Higher rate of entry tax was affecting industries, specially those units manufacturing agricultural implements,” he informed.

Meanwhile, the cabinet approved the action plan for industrial development and attracting investment in UP. Udyog Bandhu, the industry interface of the state government, has been designated the nodal agency for the purpose.

The three-tier system has been retained at Udyog Bandhu, wherein the chief minister chairs the empowered committee at state level.

The cabinet also decided to reduce value added tax (VAT) on cigarette and cigar to 25 per cent.

In July 2012, the Akhilesh regime had hiked VAT on cigarettes from 17.5 per cent to 50 per cent. The cigarette traders had then decried the VAT hike, claiming it would not only imperil the livelihood of over 6,00,000 traders/vendors in UP, but promote smuggling from neighbouring states, where the rates were much lower.

Besides, illegal cigarettes trade comprising cheap products of unbranded and duplicate brands would flood the local market.