By admin       2019-05-14

JAIPUR: Import of yarn, dyes and chemicals, capital goods, spare parts, electrical goods, and electronic goods for manufacturing did not attract any entry tax on imported goods and the companies in Rajasthan were assessed accordingly in the past. But now, after more than four years, the commercial taxes department has sent notices to textiles mills in the state to reopen the cases and recover dues. Voicing concern, Rajasthan Textiles Mills Association has written to the commercial tax department expressing fears that such a move will further strain the industry which is already battling credit crunch and demand squeeze. The industry body in the letter said the tax exemptions during the 2013-2014 to June 30, 2017 have been passed on to the consumers since they were never considered as a tax liability. The departments initiation for levy of entry tax for past four years is an additional cost which was never thought of and passed on to the end consumer of our products, the association wrote in the letter. When the goods are consumed by industry and changed into products, VAT is paid on them. Hence, the levy of entry tax after the period when the transactions have been completed long back, such a levy will not only hamper the working capital but will also break the backbone of the running business, the industry body said. What triggered the tax department to issue the letters to the mills is a Supreme Court order in October 2017 that upheld the validity of the entry tax. However, the judgment was only for four states of Kerala, Jharkhand , Odisha, and Bihar The order was meant for the four states. But what surprised us that Rajasthan has used the order to send notices to the mills in the state, a mill owner said. However, he said the government is willing to listen to the industrys views and find a solution. Since the new Congress government came to power, a payment crisis has surfaced affecting several departments. An unbudgeted farm loan waiver seems to be strained the coffers of the government. Retrospective taxes always erode the credibility of the government. If there is a fund crunch, there are other options the government should look at, said an industrialist, preferring anonymity.

Download App

# #

Member Login