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High court upholds entry tax

Guwahati, Jan. 9: Gauhati High Court today upheld the levy of entry tax by the state government on goods brought to the state from outside, heralding a major boost to the state’s revenue collection.

A two-member division bench, comprising Justice Ranjan Gogoi and Justice B.K. Sarma, while upholding the Assam Entry Tax Act, 2008, gave the government the go-ahead to levy the tax with retrospective effect from 2001.

But the long-drawn legal battle between the government and the traders on the imposition of the tax is not likely to end here, with the traders deciding to appeal in the Supreme Court.

“We are not satisfied by the verdict and we will definitely seek a revision in the Supreme Court,” said Nitu Hawelia, an advocate for the petitioners.

Since its inception in 2001, the imposition of entry tax has been mired in controversy, with the traders vehemently opposing it.

On August 30, 2007, Gauhati High Court had even struck down entry tax, upholding the contention of the traders that the tax was not “compensatory” in nature.

However, Dispur reintroduced the tax in its new avatar in June 2008, making a provision for creating a separate fund out of the collection from the tax for infrastructure development.

Altogether 70 traders separately challenged it in the high court immediately after the tax was reintroduced in June 1 last year under Assam Entry Tax Act 2008.

“Since the state government has now created a separate fund, the court observed that the benefit of tax is now being collectively percolated to the traders in the form of infrastructure like roads and bridges,” Hawelia said.

The government counsel, K.N. Choudhury, said the judgment would go a long way in increasing the state’s revenue earnings.

The Kamrup Chamber of Commerce (KCC) said the levy of entry tax on the items not produced in the state would affect industrialisation.

At present, the tax is levied on 55 items at a varied rate ranging from 1 to 20 per cent. The state government hopes to generate Rs 250 crore annually from the tax.

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