Relief for industry as HC restrains govt from collecting Additional Goods Tax

In a major relief to the state’s industry, the high court has restrained the state government from collecting additional goods tax (AGT).

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Acting on a civil writ petition filed by a textile unit and other industries, a bench comprising Justice Tarlok Singh Chuahan and Justice Sushil Kukreja passed these orders last evening.

While a stay on collection of this levy will deprive the fund-starved state government of revenue worth crores, the industry has welcomed the long-awaited relief.

This state-level levy is imposed for dispatch of goods for transport for every slab of 250 kms being covered by the road within the state.

Though various industry associations have been pleading for its abolition before successive governments, none paid heed as it added several crores to the state exchequer.

Rajiv Aggarwal, president, Baddi Barotiwala Nalagarh Industries Association, which is a conglomerate of more than 650 industries, said it is a welcome move and similar efforts will be made to stay the other state level levy, Certain Goods Carried by Road Tax.

“The two state-level taxes not only hinder competitiveness and do not align with the one-nation, one-tax regime. Their removal will align Himachal Pradesh with national standards of ‘one product-one tax norm’,” said Aggarwal.

The Himachal Pradesh Steel Industry Association had also vociferously raised voice. ”The industries are charged AGT at the rate of Rs 37.50 per metric tonne on both iron and steel. This is contrary to the basic objective of the GST Act, which dwells on one nation one tax and is levied on both raw material as well as finished goods,” rued Rajiv Singla, general secretary, HP Steel Industries Association, who is one of the petitioner.

“The industries have to file a separate monthly return as well as an annual return for the AGT for the import and export of goods from the state, besides GST returns. This is contrary to one return for all indirect taxes,” said Rajinder Singh, a Baddi-based investor.

Besides accruing monetary burden on the industry, the immense paper work involved in filing and assessment of the AGT returns inconvenienced the industry. The investors have been terming the tax as illegal, unjust and contrary to the objective and spirit of the GST Act, 2017 and also a violation of the provisions of the Constitution of India.

Cement manufacturers were among those who will save crores every month towards payment of AGT following court order.