Punjab steel industry threatens strike  

The Punjab & aposs steel industry today threatened to launch a state-wide agitation to protest a notification of the State Excise and Taxation Department, which disallows the steel trading community from claiming input tax credit under the Punjab Value Added Tax Act 2005.

Terming the new notification" illegal "and" against the spirit of VAT", the industry has also moved the Punjab and Haryana High Court.

"We will launch our agitation across the state in protest against this new direction meant for steel industry as it will hit the steel traders hard because they will not be able to claim the tax credit on their sales," Punjab Beopar Mandal President Amrit Lal Jain said today.

"We will be holding a meeting of our members along with other associations tomorrow to chalk out our new course of action against this decision," North India Induction Furnace Association President K K Garg said.

The industry has also expressed apprehension that the prices of steel might go up because of the new notification.

" When a steel trader will not be able to get tax credit then it will lead to hike in the steel prices by at least four per cent," said a steel expert.

Punjab has imposed four per cent VAT on iron and steel products.

The Punjab Excise and Taxation Department has issued a notification applicable from January 28, which mentions that only manufacturer or importer of steel items could claim input tax credit against the sales. It means that steel traders would not be able to avail tax credit on their sales made to other persons.

" This notification has been made in order to keep a check on tax evasion. As several traders were indulged in issuing fake bills and getting tax credit on the same," said a senior official of the Punjab Excise and Taxation Department.

Source : Indopia - India,  dated 30/01/2009