The Hindu : Karnataka News : GMCI opposes Special Entry Tax

Online edition of India's National Newspaper
Wednesday, Oct 06, 2004

Karnataka

Karnataka

GMCI opposes Special Entry Tax

By Our Special Correspondent

BANGALORE, OCT. 5. The Greater Mysore Chamber of Industry (GMCI) has opposed the Special Entry Tax imposed by the State Government on an extended list of articles and termed it "sounding the death knell for industry in Karnataka."

"Till now entry tax was levied on certain commodities under the Karnataka Tax on Entry of Goods Act, 1979, at one per cent to five per cent, with a special rate of 13.8 per cent for motor vehicles.

Trade and industry have been for long demanding abolition of this Act. However, in addition to the existing tax, the Government has now introduced legislation for the Special Entry Tax. This Act seeks to levy Entry Tax on goods brought into Karnataka at par with Sales Tax rates on 23 commodities, most of which are regularly used by trade and industry such as building materials, petroleum products, electrical and electronic goods, earthmovers, furniture, diesel generating sets, lifts and computers. The new Act does not provide any exemption for industrial inputs," the GMCI president, S. Chandrasekhar, said here on Monday.

Affect on industry

Although the set-off of entry tax was permitted on local sales of traded goods, it could not be claimed on inter-State sales and this would affect industry, the GMCI president said.

Industry was yet to recover from two levies — Road/Infrastructure Cess and the increase in Sales Tax during February and again in August. In view of the rationalisation of taxes in neighbouring States, the new entry tax would render industries in Karnataka totally uncompetitive. Industries may have no option but to move out of Karnataka.

Large industries were already thinking of relocating outside the State in view of the withdrawal of the notification, which provided for concessional rate of sales tax against Form 37.

The GMCI opposed the new levy, which was anti-industry and trade, he said.

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