Jharkhand traders demand simplification of VAT

RANCHI: After keeping the Jharkhand government on its toes by demanding the withdrawal of value added tax (VAT) on foodgrains, potatoes and onions, local traders plan to step up pressure for simplification of VAT.

Traders rue that even after imposition of VAT in the state, they still have to get challans cleared, which is quite cumbersome and need to be withdrawn at the earliest. We also have to file returns every three months, which only complicates matters, said Arun Khemka, president of Jharkhand Small Industries Association (JSIA).

He added: "There are several items like watches, arms and ammunition, biscuits, valves, packed foods, motor parts on which 12.5 per cent VAT is imposed. Whereas in several other states, only 4 per cent tax is charged. Which is why, we have demanded a reduction in VAT."

According to Manoj Naredi, former president of Federation of Jharkhand Chambers of Commerce and Industries (FJCCI), there are over 40,000 traders who need to fill up form 403/404.

VAT was imposed in Jharkhand in 2006-07. Tax collections have improved significantly after it came into force in the state. Sales tax collections which was Rs 1,200 crore in 2000-2001, has shot up to Rs 3,500 crore during 2008-09. If VAT procedures are not simplified, the state stands to lose a sizeable chunk of revenue.