The Hindu Business Line : `Bengal consumption tax is vital to protect domestic units'

CONSUMPTION tax, which is somewhat akin to the entry tax levied in many other States, is needed to protect the domestic units and printing materials which are brought in from other States. Stating this at an interactive session on `Implications of VAT on the printing industry', organised by the West Bengal Master Printer's Association (WBMPA) here on Monday, Mr C.M. Bachhawat, Commissioner of Commercial Taxes, West Bengal, said VAT is an extremely liberalised system of taxation, and necessitates that all transactions should be through registered dealers.

He was responding to the association's plea that the State Government should scrap consumption tax and purchase tax (mainly on paper and paperboard) as applicable to the "already heavily disadvantaged" printing industry in the State.

According to the WBMPA, consumption tax is being levied only in West Bengal, seriously affecting the working of printers in the State. It is pointed out that instead, a special consumption tax may be imposed on printed and packaging materials coming in for use and consumption.

It is suggested that books, periodicals and journals, which are already exempted from VAT levy, should also be exempted from VAT under Printing Works Contracts as well.

Mr Jayanta Bagchi, President of the association, said for States like West Bengal, which do not produce the basic raw materials required by most of the industries, VAT ideally should have been introduced only after resolving the Central Sales Tax (CST) issue.

Pointing out that the printing industry in Bengal, being a net importer of paper and paperboard, has to suffer CST on inputs at 4 per cent and on output at 10 per cent, he said the situation may now become worse for the sector if VAT is not introduced in all the States.

Responding to this, Mr Bachhawat said it is now only a matter of time before all the States implement VAT. He also gave an assurance that VAT return forms are being further simplified to ensure greater compliance from the trade. "Our officers are already being trained on the Tax Information Exchange system,'' he pointed out.

Mr Vonod Kumat Jain, Chairman, Seminar Committee, WBMPA, urged the State Government to reduce VAT on all industrial inputs for the printing industry such as printer's rubber blanket, graphic art film, graphic chemicals, industrial toners & ink catridges and viscose sponge to 4 per cent.

He said while CST on inputs should be brought down to 0 per cent at the very earliest, there should also be remission of CST on printing output to other States as industrial promotion grant, as provided for the hosiery sector in West Bengal.

Seeking a level-playing field for the printing industry, Mr Jain said VAT levy on manufacture/works contract of printed materials for unregistered dealers should be the same, whether inside the State or outside.

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