VAT hurting marble units

Marble handicraft units here are preparing an appeal to the state’s commercial tax tribunal against the imposition of value-added tax (VAT) on their products, as a sequel to their recent one-day strike on the issue.

That strike was a first for the industry, which earns, its proponents say, Rs 400 crore a year in foreign exchange.

Marble handicrafts, the industry has been told, are similar to machine-made marble goods, such as floor tiles and sanitary fixtures. The tax has been levied for all business conducted since January 2008, with recovery notices having been issued to several emporiums over the last month.

Till now, protests Dinesh Chand Bansal, director of one such unit, Marble Emporium, there wasn’t even a sales or excise tax levied on these handicrafts. Prahlad Agarwal, chairman, UP Handicraft Development Centre, says since these products are handmade and much sought by tourists, they fulfil the exemption clause of the state VAT law, under “Goods of local importance”, similar to locally-made carpets, which are still VAT-free.

Agarwal says this point was made to the commercial tax commissioner and the state government deputed an additional commissioner to give a report. Agarwal claims the report upheld their point on “goods of local importance”, but the department went ahead anyway.

Hence, he said, the local manufacturers will be appealing to the commercial tax tribunal, by the first week of March. They are hopeful of a favourable verdict; else, they will move the High Court.

Bansal says no other handicraft product is similarly taxed in the country. Besides making the items costlier, it will load emporiums and artisans with a lot of paperwork. Also, the revenue to the government isn’t proportionate to the immense hassles.