CII demands removal of entry tax in MP

The Madhya Pradesh Chapter of Confederation of Indian Industry (CII) has demanded abrogation of entry tax for speeding up industrial growth in the state.

A delegation led by the western zone chairman of CII, Srinivas V Dempo, today met Chief Minister Shivraj Singh Chouhan and pressed for their four-pronged demands to speed up industrial growth in the state.

"We want entry tax to go in Madhya Pradesh; it is increasing cost of production whereby adversely affecting the competitiveness of the industries in the state. The neighbouring states of Gujarat and Maharashtra have also abolished entry tax," Dempo said.

Entry tax had been introduced by the Madhya Pradesh government to abolish Octroi. Moreover, in the recent past, the Bharatiya Janata Party has gone further and had raised the entry tax on goods manufactured and sold in MP.

Entry tax is levied at 1 per cent on purchase of raw material by any manufacturing unit, again 2 per cent tax is levied on sale of finished goods made from that raw material. The state government has also raised entry tax on iron, steel, lubricants and coal from 1 per cent to 2 per cent. The state government has also put an additional tax of 5 per cent on coal under MP Infrastructure Development Act with effect from September 2005. "This has increased the coal prices by Rs 100 a tonne," the CII has said.

"The industrial units in backward districts are also required to get their products processed at multi-stage within the state. Sadly, the state government levies taxes for inter-mediatory processing at both the levels. Specific exemptions should be given to these units," Dempo said.

The CII has also raised some old issues that have been plaguing investment climate in the state since last 10 years.