Uttaranchal reduces VAT on plywood

50-75% subsidy given for buying agriculture equipment

The Uttaranchal government has decided to provide 50 to 75 per cent subsidy for the purchase of agriculture equipment, and lowered the value-added tax (VAT) on plywood products from 12 per cent to 4 per cent.

Approval had also been given by the Cabinet, top officials said.

With the long dry spell plaguing large parts of Uttaranchal, the state government decided that it would provide relief to farmers by giving 50 to 75 per cent subsidy on various agriculture equipment being used by farmers. Equipment like handpumps, tractor parts would get cheaper, officials said.

Though the central government is giving 25 per cent subsidy on the purchase of these devices, the state government would give additional subsidy to provide relief to farmers in view of drought-like conditions prevailing in the state, they said.

The government has also cleared a proposal to lower the VAT duty from 12 to 4 per cent on plywood products on a long-standing demand from the industry.

The decision was immediately hailed by the business community with Anil Goel, a plywood merchant, saying it would help boost the plywood industry in the state.

"We have been fighting for lowering VAT on plywood industry for a long time. We are very thankful for our Chief Minister for this gesture," said Goel, who is also general secretary of the Prantiya Udyog Vyapar Mandal.

Indian Industry Association (IIA) President Pankaj Gupta also welcomed these decisions.

Meanwhile, the Cabinet also put its seal of approval for the formation of a new Uttaranchal Transport Corporation by creating nearly 6397 new posts.