Punjab Govt. Bowls Taxation Googly at Traders


Ludhiana, Nov 13: The government of Punjab’s recent introduction a single-stage taxation on branded products at factory-level to woo the local traders in the run up to elections is being viewed with some cynicism by the channel partners, who claim there are several pre-conditions for availing the benefits.

The move was aimed at easing the tax pressures on thousands of retailers and small traders across the state who have been demanding a simplified tax collection system to make their lives easier and help them improve margins.

When Channel Times reached out to some of the partners across major cities like Ludhiana, they were quick to welcome the step as a positive one though many raised concerns over some of the conditions stipulated for availing the tax relief. “This is a positive step and will boost government revenues via additional inflow of income tax and VAT,” said one trader.

Rationalization of taxes in Punjab has been a major area of concern for several IT and non-IT business owners of Punjab. The state administration claims that of the 2.5 lac traders in the state, most aren’t following the rule-book laid out for tax collection. Available data suggests that tax dues worth about Rs.1 crore each year is collected from about 900 traders.

Says Ankur Gupta, Director of Royal Infovision in the city, “We welcome the move by the government but the main challenge lies in implementation. In the past too, such announcements have been made during election time, but nothing has come out thereafter. Having said so, we are now waiting for the new Traders’ Policy to be announced.”

Government officials reveal that the new Traders’ Policy and the modalities around it will be made public at Chandigarh tomorrow (November 14, 2013).

In the first phase, the introduction of the single stage taxation will be applicable for white goods like refrigerators and televisions, grocery or kiryana items, branded shoes and medications. Some more branded products would be included in the single stage tax in phases.

Talking about the taxation issues, Gupta said, “Each time the Punjab Cabinet meet they end up with a list of new taxes. Over the years the SMEs have been weakened in the state due to unfriendly policies. The State government has vowed to press ahead with tax and investment reforms long demanded by business, in spite of the looming general election expected to usher in populist handouts rather than financial liberalization.”

Naveen Verma, CEO of Bama Infotech and a member of Information and Technology Council said, “We are quite excited with the introduction of single stage taxation; this is a welcome move. Moreover, our council will be making a strong representative to Deputy Chief Minister for Punjab in connection to this new taxation policy on November 15th to put across all our concerns.”

Similarly some of the partners also hold this perspective that the taxation reform will also encourage investments more conducive in the State.

Of late, the Punjab government and the Tata industrial group have initiated large-scale engagement. Deputy Chief Minister Sukhbir Singh Badal solicited Tata’s support in improving the cities’ healthcare and administration system, and agreed to come up with a hotel policy.

“We are hoping that this will result in a marriage that will produce development and prove to be quite attractive for business. At the same time bring more revenue avenues for local traders,” said Gupta.

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