The Hindu : New Delhi News : Haryana revises VAT rates on automotive tyres

Online edition of India's National Newspaper
Tuesday, May 10, 2005

New Delhi

New Delhi

Haryana revises VAT rates on automotive tyres

NEW DELHI: Delhi tyre dealers today heaved a sigh of relief as the Haryana Government revised its Value- Added Tax (VAT) rates on automotive tyres from 8 per cent to 12.5 per cent.

The new rate, which will come to effect from May 14, will bring the VAT rate in the neighbouring State at par with the national Capital.

While introducing VAT in Delhi from April 1 last, Delhi brought automotive tyres under the 12.5 per cent tax slab as recommended by the empowered committee of State Finance Ministers.

However, Haryana, which had introduced VAT last year, continued to tax tyres at 8 per cent, which led to dislocation of business from the city.

Tyre dealers in Delhi were alarmed over the exodus of business to Haryana due to the lower rate of VAT on tyres in that State.

According to the All India Tyre Dealers Federation, there has been a wholesale shift in the truck/bus and taxi tyre business to Haryana in the past five weeks, which constitutes more than 70 per cent of the sales volumes in Delhi.

Truck operators have been buying tyres from Haryana, as a pair of truck tyres is priced at Rs 900 cheaper compared to Delhi.

Delhi's tyre dealers are also facing pressure from Rajasthan which has not implemented VAT. The sales tax on tyres in the State remains at 8 per cent.

Similarly, dealers in Punjab and Haryana are also under pressure, since the VAT rate on tyres in these two States is now 12.5 per cent compared to 8 per cent in the Union Territory of Chandigarh. UNI

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