Distressed with higher rate of VAT (Value Added Tax) charged for purchase of the products from the small scale industries (SSI), Utkal Chamber of Commerce and Industry(UCCI) , an apex body of industrial representatives in the state, has demanded reduction of the rate in the ensuing State Budget scheduled to be presented in the third week of February.
UCCI said, the higher VAT rate is causing hardship for the small scale units in marketing their products and demanded roll back of one per cent increase in base rate of VAT in the last budget.
“While doing the price evaluation of the tenders by public sector undertakings (PSUs) and government undertakings, they should not consider the Odisha VAT rate payable by the industrial units of the state as the same is accrued to the state government”, said Ramesh Mohapatra, President, UCCI.
In a pre-budget memorandum to the finance ministry, UCCI said, the large, medium and mega industries and the government PSUs prefer to buy their required items from outside the state by paying only two per cent central sales tax (CST) as they have to pay either five per cent or 13.5 per cent tax if they buy the same item from the state based SSI units.
The industry body in its memorandum has suggested amendment to the rule 60(3) of the Odisha VAT rules and exclusion of works contract involving only labor and services.The chamber has urged the finance department to change the status of industrial land given to SSI units from leasehold to freehold by charging a conversion fee at marginal rate. The state government will be able to raise substantial revenue that can be used in other productive ways.
UCCI has suggested exemption of stamp duty and registration fee on land allocated to SSI units and reduction of stamp duty for property registration to five per cent.