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Traders to fast on Apr 8 to protest Maharashtra taxes

The Federation of Associations of Maharashtra has announced that over 5,000 leading traders and small-scale industrialists from the state will observe a day-long mass hunger strike on April 8 at Azad Maidan in south Bombay. The fast is in protest against the recent increase in the sales tax, turnover tax and surcharge on certain items by the state government.

Mohan Gurnani, president of the FAM, said the traders demanded immediate withdrawal of one per cent turnover tax, ten per cent surcharge on gross tax collection, maximum tax rate of two per cent on industrial raw material and capital goods, reduction in tax rate on commodities to maximum two per cent.

Since professional tax is a tax on enterprise it should be totally withdrawn to encourage the enterprising persons, to come to the state of Maharashtra, and octroi must be totally abolished.

The Maharashtra government had issued an ordinance called the Maharashtra Tax Laws (levy, amendment and validation) Ordinance, 1999 on February 6, 1999, making several obnoxious amendments to the Bombay Sales Tax Act 1959. All these amendments are retrograde, the federation said while demanding their total withdrawal.

The state government has hiked the renewal and registration fees under Shops and Establishiments Act abnormally. The hike is ranging from 300 to 1,100 per cent. The Brihanmumbai Municipal Corporation has also hiked the trade refuse tax equivalent to aforesaid fees. The federation has demanded withdrawal of these "unjustified hikes".

Gurnani further alleged that the figure of Rs 3.75 billion deficit even after state government's proposals to make Rs 7.20 billion through various resource mobilisation, is either erroneous or misleading. The FAM apprehends that the government revenue will increase by at least Rs 20 billion which industry and trade will not be able to absorb in the present times of recessionary trends.

The federation has also opposed the frequent hikes in professional tax. The government has now come with a proposal to increase the profession tax almost to the ceiling laid in the Constitution.

Bullion, on which the rate of sales tax has been reduced to half per cent from two per cent, actually has a tax liability of 2.55 per cent, given the one per cent each of octroi and turnover tax. In addition, ten per cent surcharge on gross tax has also been levied.

Gurnani said that the state was earning sales tax revenue only because it served as a conduit between southern and northern states, which it stands to lose now. Similarly, the heavy burden of tax on bed sheets, towels, ghee, motor parts, tea, hessian, gunny bags and imitation jewellery will adversely affect the volume of trade. The net result will be that the state will not be able to make up the deficit at all, Gurnani added.

UNI

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