Entry tax in Punjab puts auto part makers in a fix
BS Reporter / New Delhi/ Chandigarh Aug 19, 2010, 00:24 IST
The auto part manufacturers in the region are in a tizzy over the notification of the Punjab government regarding ‘entry tax’ on new items.
A 12.5 per cent entry tax has been imposed on steel fabricated material and poles (RCC and steel). Most of the ancillaries attached to the tractor manufacturers in Punjab (Mahindra and Mahindra Swaraj Division, Sonalika Tractors, Indo Farm Tractors) and Rail Coach Factory Kapurthala are located in Chandigarh and Panchkula.
An entry barrier in the form of an entry tax would push the cost for the small scale suppliers making business unviable for them.
An official in the Punjab Government told that the state expects to mobilise about Rs 50 crore through entry tax on seven new items and revised rate of entry tax on eleven items. He added that this a form of advance value added tax that would be submerged into the proposed Goods and Service Tax.
He apprised that the entry tax on Steel fabricated material was mulled for the transformer industry (power related equipment). He added that the issue of autopart manufacturers would be discussed in a meeting of senior functionaries to draw the clarity on the subject.
The industrialists lament that lack of clarity in the government notification would create hiccups for them as it would drain their time and money at different sales tax barriers.
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