Financial Daily from THE HINDU group of publications
Friday, Jun 25, 2004
Industry & Economy
Timber importers in Karnataka strike against `heavy taxes'
Trucks are seen parked in timber yard near the New Mangalore Port area following strike by timber importers.
Mangalore , June 24
TIMBER importers in Karnataka, who are opposing heavy taxes being imposed by the Government, are on a strike for the past 20 days. They stopped activities related to timber transportation to sawmills in the State on June 5.People in the timber industry say that the sector, including sawmill owners, has incurred a loss of around Rs 90 crore to Rs 120 crore due to the strike.
Heavy taxation on the imported timber is the major contention of the importers.
Mr Babulal V. Patel, Vice-President of Karnataka Timber Importers' Association, told Business Line that every "Forest Transit" timber permit in Karnataka now costs 266 times more than what it was before May 19. Prior to May 19, timber importers used to pay Rs 15 for every permit. Now they have to pay around Rs 4,000.
Mr Patel said that the May 19 notification increased the forest transit permit to Rs 200 per cubic metre. As 20-cubic metre of timber is transported in a lorry, it amounted to around Rs 4,000 per permit.
Asked about the total loss to the sector, he said that nearly 150 to 200 trucks transported timber from the New Mangalore Port to the different parts of the State. Each lorry transports timber worth Rs 3 lakh to around 10,000 sawmills in southern India. The sector has been incurring a loss of around Rs 4.5 crore to Rs 6 crore a day. In the past 20 days, the sector has suffered a loss of around Rs 90 crore to Rs 120 crore.
Nearly 2,000 labourers work in this sector in the New Mangalore Port area. The strike has affected their livelihood also.
Added to this, sawmill industry in Karnataka was burdened with tax.
At present, these operators had to pay 8 per cent forest tax, 13 per cent sales tax, 15 per cent surcharge on road development fund and 1.5 per cent APMC tax, Mr Patel said.
These taxes were in addition to the 5 per cent income tax imposed by the Union Government, 1 per cent turnover tax and 1 per cent surcharge imposed by the State Government.
Office-bearers of the Karnataka Timber Importers' Association say that these difficulties have forced some of the importers to divert their import consignments from the New Mangalore Port to Tuticorin and Kandla ports.
New Mangalore Port, which was importing timber worth Rs 800 crore four years ago, is importing Rs 300-crore worth timbers now.
Mr Patel said that a delegation of the association would meet the Chief Minister, Mr Dharam Singh, in Bangalore on Friday in this regard.
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