Other industries also demand exemption from VAT

Shivani Bhakoo

Tribune News Service

Ludhiana, December 17

Ever since the Cycle Industry feels that it must be exempted from Value Added Tax (VAT), other industries, including cycle part manufacturers, sewing machine industry, fasteners, etc, too, have started raising the same demand before the state government.

However, taxation lawyers feel that if the government starts abolishing tax from each and every industry, then it will have to bear revenue losses in crores every year. Instead, the procedure of VAT refund should be made easier so that the industrialists face no problem.

KK Seth, MD, Neelam Cycles, here, said cycle manufacturers should be exempted from VAT as they pay taxes at the time of purchase of raw material at every step.

“Most of the cycle industry demands that VAT should be levied on cycles. During our recent interaction with policymakers, it was conveyed and we are hopeful that the state government will act on our genuine demand,” said Seth.

At the same time, some other industrialists feel that in such circumstances, each industry will want VAT exemption.

“Industries such as auto parts, fasteners, sewing machines, etc., also want VAT to be abolished. Since VAT refund involves making a lot of rounds of excise and taxation offices, no one wants to get into it. But this way, the state government should be ready to bear revenue losses. Instead, VAT refund procedures should be made easier for the industry so that none feels the heat. Influential are able to get refunds within a month or two, while others make rounds of offices for six months. Still they fail to get the refunds,” said SC Ralhan, regional chairman, Federation of Indian Export Organisation.

Jatinder Khurana, president, Tax Young Lawyers Association, said exemption was not the solution as the government would bear losses. Refund procedure should be made simpler and easier.

“Value Added Taxes are being paid at every stage. But at the time of getting VAT returns, one feels this should be abolished. If the government works smoothly and keeps a tab on its officials that none is harassed at the time of getting the refunds, paying VAT will not be a problem. These situations arise when industrialists have to make rounds of the offices and grease the palms of many to get the refunds,” said Khurana.