IIA hopeful of VAT this fiscal

Lucknow, May 31 (UNI) Industry chamber Indian Industries Association (IIA) is confident that the new Uttar Pradesh government would implement value added tax (VAT) in the current fiscal.

IIA had vociferously advocated VAT in the previous regime also, but nothing materialised owing to loud protests by a section of traders affiliated to the ruling dispensation.

''Uttar Pradesh is the only state, which is yet to implement VAT.

This has only rendered our industries incompetitive in the national market due to high cost of production,'' IIA President Tarun Kheterpal told UNI here today.

He said the level of investment had been abysmal in the state so far, due to the non-VAT regime. Besides no new investment proposals were in sight.

''VAT has become imperative now. If not implemented soon, the industries, especially small and medium enterprises (SMEs) would face closure in bulk,'' he emphasised.

''No industrialist would be willing to invest in a state, where progressive taxation system such as VAT is not applicable,'' Mr Kheterpal informed.

He claimed the absence of VAT was a big impediment in sourcing raw material from other states, since credit was not being extended, whereas sales in other states had also been adversely affected.

Besides, UP has other degenerative taxes such as development tax and entry tax, he lamented.

''The neighbouring state of Uttarakhand has been given excise exemption by the central government, while there are income tax sops too. In such a scenario, VAT is the only way, industries can survive in UP,'' IIA Executive Secretary D S Verma sounded a warning.

IIA has over 6,000 SME members across the state.

Mr Kheterpal has already put up the VAT case before UP trade tax and institutional finance minister Nakul Dubey.

The IIA president further said slowly the traders, especially medicine traders, were also realising the benefits of VAT and wanted the state to implement it at the earliest.

UNI