VAT rates slashed in Punjab

Giving major relief to trade and industry, the Punjab government approved bringing down VAT on more than 70 items, including diesel engines up to 10BHP, valves & cocks, iron hardware, etc""to be taxed now at 4 per cent, instead of the earlier 12.5 per cent.

"VAT had huge anomalies, and the 12.5 per cent VAT rate was playing the key role in wiping out small exporters. But today's approval by the Punjab cabinet to reduce VAT from 12.5 per cent to 4 per cent on more than 70 items will protect the small scale industry from the destruction," A K Kohli, senior vice-president of the Punjab Chamber of Small Exporters, told reporters.

"The small scale industry is providing huge employment to the youth, especially the diesel engine industry," Gursharan Singh, president of the Federation of the Jalandhar Industrial and Trade Association, said.