The local trade body has asked the State Government to lower VAT rates to make State-based companies competitive.

Currently, the VAT rate is at 13.5 per cent in Karnataka, while in other States it is around two per cent, the Karnatak Chamber of Commerce and Industry (KCCI), Hubli in its pre-budget memorandum to Chief Minister, Mr D.V. Sadananda Gowda, said.

“Taking advantages of this anomaly, vendors/industrialists of other States are supplying materials to South Western Railways (SWR). Since the rate of VAT in other States is also lower and also due to inter-State transactions based on C Forms, they are able to take advantage,” the chamber said.

“The State should follow low tax regime on the basic price plus CST two per cent as practiced by West Bengal, Delhi and Maharashtra. Modifying the tax structure will encourage local industries,” it added.

The chamber also urged the State to offer tax exemption for sick industries.

The chamber said, “Adoption of new method for reviving and re-starting the sick industries is essential. The subsidy shall be made available within the stipulated time to small and medium industries for their survival.”

E-Sugam

KCCI has also asked for review of ‘E-Sugam' introduced recently. “Some traders are facing technical problem in compliance. For filing returns, we urge you to give 30 days additional time and increase the limit from Rs 20,000 to Rs 1 lakh transactions.”

Reduction of VAT rate on cotton and cotton seeds from five per cent to two per cent is also essential. The chamber has asked for exemption of VAT on dry chilli, groundnuts and other agricultural commodities, as some districts are facing drought.

APMC

The APMC traders are paying cess at 1.5 per cent for the last few years. The chamber has demanded reduction to 0.5-1 per cent.

“The APMC traders are facing some technical problems in complying Form No.35-A and 35-B. It should be simplified on the lines of VAT.”

In the neighbouring States, all APMC commodities attract two per cent tax. “In Karnataka, only few commodities are under two per cent tax. Hence, we request the Government to include all the commodities to have similar tax structure.”

The pre-Budget memorandum was submitted by Mr N.P. Javali, President, and was accompanied by Vice-Presidents Mr Vasant N. Ladawa, Mr Andanappa V. Sajjanar, Mr Mahendra H. Ladhad, Mr Vishwanath S. Ginimav, Secretary, and Mr C.N. Karikatti, Joint Secretary.

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