The Telegraph
Since 1st March, 1999
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Entry tax rethink on radar

Calcutta, June 4: The government is reconsidering its decision to levy entry tax on goods brought in from outside the state.

Announcing the budget proposals for 2003-04, finance minister Asim Dasgupta had said the government would re-impose entry tax that was done away with in 1995.

Principal secretary of the department of commerce and industries Sabyasachi Sen today said: “The chambers (of commerce) had written to the chief minister, strongly resisting the move. The chief minister has asked the department of commerce and industries to assess the situation and convey its impressions. We are currently examining the proposal and will express our views soon.”

Sen was addressing businessmen at a seminar organised by the Confederation of Indian Industry in Calcutta today.

Though Sen refused to divulge his impression of the tax that would make all goods produced outside Bengal costlier, businessmen felt the government might yield to their resistance.

Sen said the government would have had to introduce a Bill in the Assembly to re-impose the tax, but it had not initiated the process yet. Dasgupta had announced his intentions to introduce the tax on March 20.

“At a time when the state government is trying to woo investors to West Bengal and looking at closer ties with the business community, it’s unlikely that it’s going to disappoint us. We were always hopeful and after Sen’s statement today, we are quite sure that the tax would be dropped, at least for the time being,” said a businessman.

Dasgupta, who deviated from his zero-deficit budgets by projecting a Rs 793-crore shortfall in the current fiscal, had sought to rustle up Rs 500 crore in additional revenues from the tax.

He had assured that the tax would not lead to increase in prices, arguing that the introduction of value-added tax (VAT) would bring down prices and neutralise the impact of the entry tax. Industry disagreed; it felt prices would go up.

Justifying the tax, Dasgupta had said the funds requirement of municipal bodies had increased and the government needed extra cash to support them. Though entry tax was abolished in Bengal on April 1, 1995, a number of states continued with it, he had argued.

Agri-export zone

Darjeeling could soon be turned into an agri-export zone that will benefit the tea industry, which is in need of some cash incentives.

“The government and the planters have had discussions with the Union commerce ministry and we are hopeful that the district would be declared an AEZ within this fiscal year,” Sen said.

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