Commercial taxes department has taken note of differential value-added tax (VAT) on items supplied to the Government and State entrepreneurs are losing business opportunities, said the Karnataka Commissioner of Commercial Taxes, Mr Pradeep Singh Kharola.

Addressing the Karnataka Small-Scale Industries Association (Kassia) members at an interactive workshop, Mr Kharola said Yes, this is a genuine concern of small and medium entrepreneurs and it will be taken up with the finance department in our next meeting.

Commending the tax payers for prompt filing of taxes, he said after the introduction of VAT in Karnataka, the Department has been performing well in bringing in reforms for efficient tax mobilisation and has maintained good tax GDP ratio.

Mr Kharola said Ever since we introduced e-filing, there has been a good response for it.

In just under three months, we have achieved 100 per cent i.e. is all 4.5 lakh dealers in the State have begun to file online.

Talking on e-sugam, he said nearly 90 per cent of transactions have moved to e-sugam mode and the State is likely to achieve 100 per cent by March.

The department by moving into this method (e-sugam), a voluntary disclosure and filing, has been able to save nearly two tonnes of paper, he added.

Commercial taxes department is also working on a mechanism for e-refund. This is an area of concern for both the department and the business community. This will be done in a phased manner from the next financial year, he said.

The Kassia President, Mr Prakash N. Raikar, submitted a memorandum to the Karnataka Government containing few grievances of the SMEs.

Mr Vijay Makal, Chairman, Kassia sub-committee on commercial taxes, brought to the notice of Commissioner of Commercial Taxes that there are number of items of mass consumption such as processed food items, packaged drinking water, utensils which are under 14 per cent VAT.

The Government has exempted most of the food items such as bread and bun etc., from payment of VAT or levying virtually zero per cent tax. But the products such as machine-made chapattis, which very much fit into the definition of bread (specially as Indian bread), are altogether undergoing different treatment.

We wish the Government to intervene in such situation and reduce the rate of tax from 14 per cent to 4 per cent, he added.