Trade and industry are upset with the Madhya Pradesh government's decision to increase the entry tax on infotech products along with certain other items.
The items that will attract higher entry tax include computers and their component, air-conditioners, deep freezers, typewriters, calculators and tabulators, registering and index material, card punching and duplicating machines, photo copi-ers and their components, fax machines and their components.
While computer and its accessories will attract a 4 per cent (earlier 1 per cent) entry tax, air-conditioners, deep freezers, typewriters, calculators and tabulators, registering and index material, photo copiers and their components, and fax machines and their components will attract a 12 per cent tax.
Criticising the move, local traders said the items included in the higher entry tax list were not manufactured in the state. The entry tax hike would make these items costlier and availability cumbersome.
The entry tax had been increased to protect local manufacturers of these items. A large number of traders had started importing these items from other states because of a lower rate of sales tax there. It was affecting the state revenue, said a commercial tax department spokesman.
"There is no logic behind the decision. Madhya Pradesh does not manufacture any of these items. For example, there is no computer making unit in the state. So where is the case of protecting local industry?" asked SK Agrawal, president of the Bhopal Chamber of Commerce.
Other trade and commerce chambers have also come out against the move. "All taxes should be merged and only the value-added tax (VAT) should be implemented. We have also demanded abolition of the entry tax," said Sunil Misra, director of the Bhopal chapter of the Confederation of Indian Industry (CII).
