The Hindu : Front Page : Traders threaten indefinite strike against VAT regime

Online edition of India's National Newspaper
Tuesday, Feb 22, 2005

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Front Page

Traders threaten indefinite strike against VAT regime

By Our Special Correspondent

NEW DELHI, FEB. 21. The all-India traders' bandh today, called by the Confederation of All-India Traders (CAIT) to protest against the Value Added Tax (VAT) regime, disrupted business and commercial activity in various parts of the country while evoking a mixed response in some others.

Traders have threatened to go on an indefinite strike unless the VAT regime, proposed to be implemented from April 1, is rendered more "trader-friendly," and certain essential commodities are taken out of its purview.

Interestingly, however, the issue appears to be donning a political colour. While most States are ready to implement it in spite of the agitation, others have started voicing concern.

In the four major metros — Delhi, Mumbai, Kolkata and Chennai — the wholesale commodity markets remained closed in protest against the "harsh" clauses of the VAT regime. Retail business was also affected as traders took to the streets alleging that essential items would cost more under the new tax dispensation.

Trading came to a halt in Andhra Pradesh, Assam, Maharashtra, Punjab, Rajasthan, Uttaranchal and West Bengal as both wholesalers and retailers chose to down the shutters. In Delhi, Jammu and Kashmir, Karnataka, Kerala and Tamil Nadu, the bandh evoked a partial response.

Meeting sought

CAIT, its secretary-general, Praveen Khandelwal, said, had sought a meeting with the Empowered Committee of State Finance Ministers by February 27 to sort out the differences. "If the VAT panel fails to carry out the necessary changes, traders will go on a hunger strike on March 17."

According to Mr. Khandelwal, Uttar Pradesh, Madhya Pradesh, Gujarat and Rajasthan were not prepared for VAT. "The list of 550 items, which are to come under VAT, has not been finalised yet. This reveals the contradiction among States in implementing VAT."

Traders are apprehensive that many commodities would be taxed at 12.5 per cent under the new regime as compared to the current levy of between four and eight per cent. "This," Mr. Khandelwal said, "will lead to a rise in prices and higher inflation."

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