PHD Chamber’s Achievements: VAT rate reduced on select items in Uttar Pradesh

UP Government’s decision last year to increase VAT rate on several items created concern in the State’s industry and trade circle. This announcement came just before the country was beginning to be affected by the global economic meltdown.

Based on feedback from members, PHD Chamber called up on the State Government to reduce the tax rates and actively followed it up with Industrial Development and Commercial Taxation Departments of the Government.

The concentrated efforts resulted in the acceptance of Chamber’s recommendations by the State and we are pleased to inform that the State Government has reduced VAT rates on 16 January 2009, from 12.5% to 4% on the following products:

• Preserved & Processed Fruits & Vegetables;
  
  
• Coffee Beans & Seeds, Cocoa Pods & Beans and Green Tea Leaf & Chicory;
  
  
• Recordable CDs/DVDs; and
  
  
• IT Parts & Components

Further more the Chamber would also like to inform members that issue regarding abolition of Entry Tax has also been taken up with the State and we hope that the Government shall soon announce a relief package.

Meanwhile the State has excluded certain items used as raw material in the iron and steel industry from the levy of entry tax and iron & steel (as defined under Sec. 14 of Central Sales Tax Act, 1956) excluding the following shall be subject to 1% tax:

• Pig iron, sponge iron and cast iron including ingot moulds, bottom plates, iron scrap, cast iron scrap, runner scrap and iron skull scrap;
  
  
• Steel semis (ingots, slabs, blooms and billets of all qualities, shapes and sizes);
  
  
• Steel melting in all forms including steel skull, turnings and borings; and
  
  
• Wires-rolled, drawn, galvanized, aluminized, tinned or coated such as by copper.

NB: Notifications issued by the Commercial Tax Department, UP are attached for ready reference of members.