Punjab - Pay VAT on silk fabric, excise department tells dealers after 3 years

Almost three years after the implementation of Value Added Tax (VAT), the Excise Department has told traders that the tax is to be paid on silk fabric too.

In addition, the department has also told the traders that they are supposed to pay tax since April 2005, along with penalty. Members of Ludhiana Silk and Saree Association say they have been left baffled at this announcement by the department.

Members say that it is unfair of the department to inform them of the tax so late, and now also expect them to pay penalty on it. Association members assert that they will neither pay the accumulated tax, nor they will they register themselves for paying tax henceforth. The members claim that the department is harassing them by including this item in tax net.

The dealers met Deputy Speaker Satpal Gosian, and say that he supported their cause. Upesh Gupta, president of the association said, “About 10 days ago, the excise officers had visited the shops of some silk cloth traders. Their stocks were checked, and they were later told to pay 4% VAT on it. We have been asked to register ourselves with the department at the earliest.”

The association members say they have urged the Deputy Speaker to get this item exempted from tax net. Gupta said, “The department feels that silk is a luxury item, which is not true. The sale of silk is limited these days. This is a 95% handloom product, and should not be in tax net.”

This statement of the members has surprised the excise officials, who highlight that silk is an expensive, elite product. Meanwhile, Deputy Excise and Taxation Commissioner MS Kondlus confirmed the visit of officers to the silk shops. He added that the department will charge tax April 2005 onwards.

Source : Ludhiana Newsline - Ludhiana, India, dated 29/12/2007