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K.R.Srivats

NEW DELHI, Jan. 27

INDIA Inc. may express its reservations to the Centre's proposal empowering the State governments to levy sales tax/value-added tax on sugar, textiles and tobacco products at rates ranging from one per cent (floor) to four per cent (ceiling).

The proposed move to empower States is in addition to the existing additional excise duty (AED) on these products, which are levied by the Centre and to be continued by it even after the introduction of value-added tax (VAT) regime from April 1, 2003.

"At our meeting with the Chairman of the Central Board of Excise and Customs (CBEC), we plan to raise the issue of the proposed move to continue with AED at the Centre's level and also levy VAT at the rate of between one per cent and four per cent on these three products at the State level. The prices of the three products would increase if both AED and sales tax are levied at the Central and State levels respectively", industry sources said.

A section of industry is to meet the CBEC Chairman, Mr Zutshi, on Tuesday to discuss certain "industry specific" concerns relating to the forthcoming Budget for 2003-04.

Industry representatives are also set to make a case for effective remedies on the aspect of different "entry taxes" that are being imposed by the State governments on certain products.

"The issue of entry tax and a host of other local taxes has a great implication on the competitiveness of industry even if a VAT regime to replace the sales tax were to be introduced", they said.

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