UP govt withdraws hike in VAT on Computers, cell phones

Lucknow, Sep 29 (UNI) Giving some relief to the consumers, Uttar Pradesh government today decided to roll back tax hike on two items -computers and Mobile phones -- but entry tax of two per cent would continue to be enforced on computers and its accessories.

Now computers -- desktops, laptops, periferals, LCD monitors-- and mobile phones would be charged with four per cent VAT against the the proposed 8.5 per cent hiked rate.

However, the government had decided to hike the rate of VAT on molasses from four to 12.5 per cent to be enforced from April 2009.

The decision to implement the tax hike in molassis from next financial year was taken as policy decision of molasses for the year 2008-09 was already enforced earlier.

According to official sources, the entry tax of two per cent on computers and its accessories would continue.

The government has notified the hike of VAT in 42 items from four to 12.5 per cent from October 1 next.

Sources said now the number of entry tax category has gone up to 20, which was 11 on September 19 last.

Meanwhile, the traders are up on their arms and different groups have called bandhs and other agitational programmes to force the government to withdraw the hiked rate of VAT.

While, the Shyam Bihar Mishra group of traders had observed a mixed bandh of markets today in the state, the Banwari Lal Kanchal group has called the bandh on October 4.

UP Yodog Vyapyar Pratinidih Mandal chairman Mr Kanchal said that traders would continue to agitate till the government withdraws hiked taxes on all the items.

The State Government had earlier decided to hike the rate of Value Added Tax (VAT) and reimposition of entry tax on different items, including computers, mobile phones, tea and electronic goods and others.

The government defending the hike in the commercial tax and imposition of entry tax on certain goods said the tax rates under VAT were reduced to four per cent on many goods and commodities which has now been increased to 12.5 per cent as the benefit of the cut in tax rates was not being passed on to the consumers by the traders.

UNI MB JAS SR RK1935