1% increase in VAT not to impact essential item prices
June, 03rd 2009
The Uttar Pradesh government today said increasing the value added tax rate by one percentage point in various slabs will not have any impact on prices of essential commodities, including foodgrain.
" Reports suggesting that prices of foodgrain like wheat, rice and pulses and other items like coal and iron have gone up after imposition of AT are baseless and misleading. No additional tax had been imposed on these (essential) items," Commercial Tax Commissioner Anil Sant said in a statement.
The 1 per cent AT had been imposed on certain commodities on which 12.5 per cent VAT was already being charged, he said.
He said there were number of items on which entry tax of 2-5 per cent was being charged in the state.
"As a result of entry tax traders were failing to compete with others states like Delhi. Keeping in view the impact on trade in the state the government decided to withdraw entry tax on these items,"he said.
Items on which entry tax was being charged included clinker, imported wood, machinery and machinery parts of over Rs 10 lakh, aluminimum and its products, cables, laptop, computer system and television, marble stone and tiles, refrigerator and air conditioning plants, he said.
The commissioner said withdrawal of entry tax had reduced prices of these commodities.