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`The decision of the Government to impose VAT on MRP is applicable to all packaged goods, but the KVVES decided to boycott only tobacco products.' State Govt urged to ensure security for legal businesses

Kochi May 6 FMCG Dealers Association has criticised the call of Kerala Vyapari Vyavasayi Ekopana Samithy (KVVES) to seize tobacco products as part of the latter's campaign against VAT on MRP in the State.

Addressing a press meet, the association representatives said that these products are being legitimately distributed and retailed across the State and the Government should take appropriate action against such an open call to take the law in one's hand. The association also demanded that the Government ensure security for legal businesses.

The FMCG Dealers Association said that they have serious concern about the way KVVES is proceeding with the strike. The decision of the Government to impose VAT on MRP is applicable to all packaged goods, but the KVVES decided to boycott only tobacco products. If the KVVES is genuinely concerned about the VAT on MRP issue, why should they single out and target the cigarette trade, the association asked.

`Didn't consult'

They alleged that KVVES, which is supposed to be an apex organisation of various trade associations of the State, never bothered to consult the Kerala Cigarette and Tobacco Dealers Association, which is an affiliate organisation of KVVES, regarding this issue.

Without even considering the member body's stand in the issue, KVVES has announced a cigarette boycott, they added.

The Association pointed out that the issue of VAT on MRP is against the essence of VAT rules itself. None of the other States, including West Bengal, whose Finance Minister is the Chairman of the Empowered Committee on VAT, has imposed VAT on MRP in their respective States.

Apex court ruling

On a similar issue in Rajasthan, the Supreme Court had even ruled that levying VAT on MRP at the first point of sales is not legally sustainable.

They also clarified that retailing is in a way the backbone of the State's financial strength, and it takes the products to the end user and thus facilitates the flow of taxes to the State's exchequer.

More Stories on : Taxation | Tobacco | Taxation | Kerala

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