Textile traders' protest against VAT entered its second
day on Tuesday bringing the business in this sector
across the state to a complete halt. Officials of
commercial taxes department, however, continued to take
a firm stand saying there was no going back and traders
would eventually have to pass on the VAT burden to
customers.
Speaking with TOI, commissioner of commercial taxes,
Suresh Chanda indicated that there would be no softening
on part of the government. "We have been instructed to
collect tax and there has been no change in the
directive given to the commercial taxes department," he
said.
Explaining the government stand, Chanda said, "It is the
individual state's discretion to levy tax. Every state will have to eventually
impose tax on textiles as it was removed last April from the list of items on
which additional excise duty is charged. Textiles were under this category from
1957 until last year and hence VAT was not imposed. But once removed from that
list, it becomes taxable. It is then up to the state government to decide when
it wants to collect tax."
Pointing out that customers would have to bear the brunt of the tax and not
textile traders, Chanda said the fears of traders about VAT being not affordable
for them were unfounded. "Traders feel that they are going to be paying tax out
of their margins. In truth they will only have to collect it from the customer
and give it to us. We have tried to explain it to them on numerous occasions,"
he said.
When asked about concerns expressed by traders about losing out business to
other states, Chanda said that it was highly unlikely. He opined that having
been out of the tax bracket until now, the traders do not want to be taxed. He
said that only traders who have a turnover of Rs 40 lakh and above fall under
the VAT bracket.
Claiming that 1600 traders have already registered with the department, Chanda
said traders will ultimately have to pay tax dues from July last, along with a
25 to100 per cent penalty according to norms for defaulting on tax payments.
