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The Federation of Karnataka Chambers of Commerce and Industry (FKCCI) has urged chief minister Siddaramaiah to reduce the value added tax (VAT) rates from 14.5 per cent to 14 per cent with immediate effect so as to help trade and industry which are reeling under the heavy burden of taxes.
A delegation lead by R Shivakumar, President, FKCCI, and B T Manohar, Chairman, State Taxes Committee, FKCCI, met the chief minister and sought urgent relief in the VAT rates.
The FKCCI members also discussed the issue of Trade License and other problems faced by the MSMEs in the state.
Shivakumar stated that presently the rate of taxes for VAT is charged at 14.5 per cent, which is too high and it has become uneconomical for industries to operate in the state.
He urged the chief minister to fulfill the promise of 14 per cent and 5 per cent VAT rates made in the 2013-14 budget earlier this year.
He also stressed that the target collection of the taxes will be easily met, resulting in a surplus of around Rs 800 crore during the fiscal year. The federation is addressing issues on new registrations at the taluk levels for higher tax collections and the process has already been put in motion.
On the issue of the abolition of Trade License under the KMC Act, Shivakumar stressed that industry needs to be exempted from the Trade License Act as the units are covered under various statutory laws.
The Trade License is causing unnecessary burden and leading to financial stress on the business community along with the process of renewals.
Shivakumar also stated that the MSMEs/SMEs are on the verge of closure due to the lack of skilled manpower, high interest burdens, outdated technology and a lack of availability of start-up funds for the new ventures and sought the help of the government for the establishment of a separate cell on MSMEMEs. FKCCI has also stated that it would participate in the proposed meet at Chamarajnagar for the development of the district to attract other investors to the district.
The federation also suggested development of a Turmeric Park in the district.
Siddaramaiah promised the delegation that he will study and consider the suggestions favourably and a meeting will be called for further hearing shortly.
