Assam industry wants govt to do away with entry tax

The industry of Assam has asked the state government to do away with entry tax on raw materials, inputs goods, packing materials, consumables and fuel used for manufacture of finished goods. The industry is of the view that levying of entry tax is counter-productive and against the very spirit of Value Added Tax (VAT). 

Though entry tax on plant and machinery has been exempted under the state industrial policy, the state government levies tax under various slabs on entry of various other goods while entering the state from outside. Since entry tax is not eligible for input tax credit, the industry feels it increases the cost of production for units operating in the state. 

 

“Section 3 of the Assam Entry Tax Act, 2008 may be suitably amended so as to exclude all the raw materials and packing materials for industries , whether or not covered by the existing entries of the schedule from the purview of the Assam Entry Tax Act, 2008,” said R S Joshi, chairman of Federation of Industry and Commerce of North Eastern Region (FINER), the leading chamber of commerce of Northeast. 

Citing the example of bitumen, Joshi said the product is widely used in road construction works. No bitumen is produced in the entire Northeastern region and hence it should be exempted from entry tax to make the industry competitive. He said even neighbouring state of Meghalaya too does not levy entry tax on bitumen. 

The chamber of commerce also said that plastic is categorised as green industry and levying of entry tax on granules was adding to the cost of products.  It is requested that plastic granules be exempted from entry tax. 

It also said entry tax on raw materials used for manufacturing of sleepers, used by the railways, was affecting the industry. “Entry tax of 4% is imposed on raw materials in Assam. Since Railway calculates the net factory price at the time of finalisation of the orders, the units in Assam loses huge orders to the unit located at West Bengal,” Joshi said. 

The entry tax in West Bengal is just 1% on raw materials for sleeper manufacturing and as such they have price advantage over the units located in Assam. Sleepers manufactured by units in Siliguri, in West Bengal, were used in projects undertaken in Assam like the Lumding-Silchar Gauge conversion. “This results in loss of VAT to the state government as the units in Assam are unable to bid successfully for these tenders,” Joshi added.