CII calls for abolishing entry tax in MP

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Bhopal, Sep 19 (UNI) The Confederation of Indian Industry (CII) today urged the Madhya Pradesh Government to abolish entry tax on goods manufactured and sold within the state to ''protect its industry''.

Led by its Western Region Chairman Shrinivas V Dempo, a CII delegation called on Chief Minister Shivraj Singh Chouhan here and submitted a memorandum, which also demanded extension of exemption from entry tax for all motor vehicle parts being used by automobile manufacturing companies, withdrawal of increase on development charges on leasehold land by MPAKVN, implementation of the Industrial Township Act, benefits of SMES on expansion and exemption of large-scale industries from form 88.

Terming the entry tax as ''irrational in the present global competitive business,'' it pointed out that all materials -- raw material as well as finished goods -- being purchased and sold in Madhya Pradesh are subjected to three per cent entry tax -- one per cent on raw materials purchased and two per cent on finished goods being sold.

However, industries based in other states, which are not charging entry tax, get competitive advantage when they sell their products in Madhya Pradesh.

Pointing out that neighbouring states of Maharashtra and Gujarat have announced abolition of octroi without introducing any entry tax, it suggested that Madhya Pradesh should also abolish it to make its industry competitive.

It felt that hike in entry tax from 1 per cent to 2 per cent on iron and steel and lubricants, which was highest as compared to other states, had hampered the industrial growth severely.

A similar tax increase on coal had impacted coal prices. It also regretted the poor quality and shortage of coal in the state.

Observing that tyre industry was presently operating at a very thin margin due to global competition, it requested the Chief Minister to withdraw entry tax on sale of tyre, tube and flaps.

It also called for restoration of exemption on entry tax on expansion in existing units.

It demanded specific entry tax exemption for industrial units in backward areas if their product is sent for intermediary processing from one local area to another area, saying these units are required to get their product processed at multi-stages within the state.

''At present, entry tax is levied even if the goods are sent for intermediary processing from one local area to another local area.

This tax at both the stages leads to cascading effect of taxation and unit does not remain competitive,'' he added.

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