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States are free to fix sales tax for commodities, clarifies Sinha

Finance Minister Yashwant Sinha has clarified that the Centre has no role in fixing the sales tax rates of various commodities as it was a state subject.

The uniform floor sales tax system provides flexibilty to the states to fix their own rates within the limits recommended by the Chief Ministers' Conference recently, Sinha told a traders' delegation, led by senior BJP leaderns.

The finance minister informed the team that the Centre had only recommended the lowest and highest rates of sales tax and the concerned states could fix such taxes according to their desire.

Sinha told the delegation that the four slabs of the sales taxes are: zero to four per cent, four to eight per cent, eight to 12 per cent and 12 per cent to 20 per cent. The states have the choice to fix either the lower or the maximum rate or that in between the slab, Sinha said.

The delegation leaders asked the Delhi government to clarify the rationale behind the lowering the sales tax on select commodities like dry fruits and rice while not decreasing the same tax on silk and otherimportant commodities, when some other states have fixed a much lower sales tax on them.

Alleging that the Delhi government had done a ''favour to dry fruits and other traders for raising funds for the coming assembly elections in four states, the delegation said that the government should fix sales tax rates marginally lower than the other northern states to enable the city retains ''distributive'' character. He wanted that an all-party meeting should be called before February 7 to discuss the ''sales tax problem'' of the traders.

Mishra said the Centre should intervene in the complex situation and fix the maximum rate of sales tax at six per cent. The high sales tax would lead to tax evision by traders, he feared.

UNI

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