With its ally BJP breathing down its neck and due to the fear of backlash from the trading community, the Punjab Government on Tuesday announced to rollback the ‘advance tax on stock’ by bringing amendment in the Punjab VAT Act 2005.
Punjab Deputy Chief Minister Sukhbir Singh Badal ordered the withdrawal of the amendment made in the first proviso to section13 (1) of the Punjab VAT Act, 2005 for availing input tax credit.
Badal, who also holds Excise and Taxation portfolio, asked the Excise and Taxation Department to draft an ordinance in this regard and present it for approval in the next meeting of the State Cabinet.
An official spokesman said, “To redress the grievances of traders community, the State Government will amend the clause 13 (1) of Punjab VAT Act by an Ordinance.”
He said traders associations had met the Deputy Chief Minister recently and apprised him of some suggestions into the said VAT Act to check evasion of input tax credit (ITC).
Keeping this in view, Badal asked the department officials to extend the date of filing VAT returns till August 20 and provide option to traders to file their returns as per previous practice.
Ruling Shiromani Akali Dal (SAD) was facing massive criticism from trading bodies over ‘advance tax on stock’ and several BJP MlAs had even supported the trading community over the issue.
BJP MlA and Minister Anil Joshi had openly supported traders by demanding rollback of ‘anti-trader’ taxation provision and threatened to lead the protest of traders.
Traders alleged that it was unjustified to pay tax on goods which were lying unsold.
Meanwhile, Punjab Government spokesman said in October 2013, the State Cabinet had given nod to amend section 13 (1) of Punjab VAT Act and this amended proviso was also passed by the Punjab Assembly in this Budget Session.
With this amendment, ITC would not be available unless such goods were sold or used in the manufacturing or processing of goods in the State.
ITC is a concession granted by the State Government against the output tax liability on the sale or purchase of goods within the State jurisdiction.
BJP praises Govt’s move
The Punjab Government’s decision to withdraw ‘advance tax on stock’ was hailed by the State unit of BJP.
BJP Ministers have been raising the concerns of the trading community demanding withdrawal of the ‘advance tax on stock’.
Welcoming the announcement, State BJP chief Kamal Sharma said, “Withdrawing this new amendment is a welcome decision and would provide relief to the traders. I thank the State Government for making announcement in this regard and respecting the general sentiments of the traders that is against this tax.”
He said that apart from other senior leaders, he himself has taken up the matter with the CM and the Deputy CM.
“The party is committed to protect the rights of traders and would continue to raise the demands of the community in future as well,” he added.