Scrap of entry tax blow to local industry, not revenue: Assam govt

Guwahati, Sept 1 (UNI) The Assam government today clarified that the quashing of entry tax by a Gauhati High Court judgement would not mean a major blow to the revenue collection, but was a big setback to the local industry.

State government spokesperson and Cabinet Minister Himanta Biswa Sharma said, '' The judgement is a big setback to the local trade and commerce, and not a major blow to tax collection of the state government as has been projected by a section of the media. '' A two-member division bench of Gauhati High Court had held the entry tax, imposed by the Assam government, as illegal and ordered its scrapping on August 30 last.

The Court had been moved by a group of 150 traders, mostly comprising representatives of multinational companies (MNCs).

Dr Sharma maintained that the tax was introduced by the state government to protect the local industry as the entry tax on goods brought from outside, which were also locally produced, gave the local producers a price edge in the market.

'' The entry tax was a barrier for outside goods from flooding the local markets and grabbing the market share of the local indigenous producers and entrepreneurs, '' he added.

Pointing out that the full copy of the High Court judgement was not available with the government yet, the spokesperson said, '' We will study the complete judgement and take appropriate legal redressal steps to our concerns for the local industry. '' He informed that the Presidential assent had already been sought for the entry tax and it had been sent in April itself. '' The entire process takes time and we can expect result only after about a year, '' he added.

He said out of the 53 items under entry tax, most were minor items, like gamochas (Assamese traditional towels), mekhala-chadar (Assamese traditional garments), fruit juice and flowers, which were taxed to protect the interests of the local producers.

Dr Sharma said, '' Only tobacco and crude oil were major items in the 53 item list. Tobacco has already been moved under the VAT list. '' He informed that Rs 296 crore was collected as entry tax in 2005-06 and Rs 216 crore in 2006-07. However, the amount would not have been much above Rs 100 crore in the current fiscal as many of the items had already been shifted to the VAT list.

He also clarified that the government would not have to make any refund as the court had ordered refund only if the companies could prove that the tax burden was not diverted to the consumers.

UNI