KCCI for lowering rate of turnover taxes to 0.25 pc

The Kashmir Chamber of Commerce and Industry (KCCI) has demanded rate of turnover taxes in the state be brought down to 0.25 per cent from the present one percent.

At a meeting on Saturday with Chairman Empowered Committee of State Finance Ministers (EC) on VAT, Dr Asim Das Gupta, president KCCI, Dr Mubeen Shah argued that there was no uniformity in the rate of turnover tax across the country.

“While the turn over tax rate in different states of India was fixed at 0.25 percent, Kashmir has to pay one percent. Keeping in view the shattered economy of the state and the need to rebuild the moribund state industry, the rate should be brought at par with different Indian states,” Dr Shah said adding that the amount taxable under turnover tax should be raised to Rs 50 lakhs from the present Rs 20 lakhs.

Dr Gupta who is also the Finance minister of West Bengal is presently in the valley to head 6th Empowered Committee meeting of 2007.

The KCCI urged that the commodities like handmade Kashmiri carpets and shawls, wood carvings, saffron, raw wool, raw Pashmina, wool tops, medicines, and green tea be brought under zero per cent VAT.

“World famous Kashmiri Carpet and Shawl industry that provides employment to thousands of Kashmiri youths have a great importance in and outside the valley. But their export trade has been heavily affected in the VAT regime. In order to give a boost to the Carpet, Shawl and other industries in the Valley, we want these items be bought under the zero per cent VAT,” the KCCI members said.

The issue of charging VAT from the local contractors, who haven’t been given the VAT credit, at much higher rates as compared to rates in outside states, was also raised in the meeting by KCCI.

“While import of raw material outside J&K state attract only four percent Central Sales Tax (CST), we have to pay 12 percent VAT on purchases in the state,” Dr Shah said and added that the audit amount should be increased from Rs 40 lakhs to Rs 1 crore.

The issue, Dr Shah said, was of great concern and it results in diversion of purchases by local big and small contractors from outside state.

Responding to their demands, Dr Gupta assured the KCCI members that the issues raised by them would be seriously discussed by the EC.

“In case of exemption particularly to handicraft sector including Kashmiri shawls, wood carving, raw wool, we have asked the state government to justify their inclusion under handicraft so that they can come under the ambit of zero percent VAT,” Dr Dasgupta informed the KCCI members.