The delegation led by R. Shivakumar, President, FKCCI, briefed the chief minister that presently the rate of taxes for VAT charged at 14.5 percent is too high and it has become uneconomical for the industries to operate in the state. “We told the chief minister that the VAT rates were raised by the then BJP government under the leadership of Jagadish Shettar on various reasons including drought. It was promised to be a temporary increment. We told him the target collection of the taxes will be easily met resulting in a surplus of around Rs.800 crores during the fiscal year. Therefore, we requested the CM to reduce the VAT charges at least by one percent,” Shivakumar elaborated the meeting to SupporBiz.
The delegation also included B.T. Manohar, Chairman, State Taxes Committee, FKCCI and Sudarshan Tirunarayan, Secretary General, FKCCI.
On the issue of the abolition of Trade License under the KMC Act, Shivakumar stressed the fact that the industry needs to be exempted from the Trade License Act as the units are covered under various statutory laws. He said the trade license is causing unnecessary burden and leading to financial stress on the business community along with the process of renewals.
“We also spoke about the state’s contribution to railway department. The state government is supposed to contribute Rs. 650 cores to the railway department and the chief minister has promised to clear the payments soon. He said the state will release Rs. 150 cores this month and will release the rest soon. We requested the government to release Rs. 125 cores or at least Rs. 110 cores every month. This will speed up many of the pending railway projects that will help the SMEs in the state,” he said.
Shivakumar also stated that the SMEs are on the verge of closure due to lack of skilled manpower, high interest burdens, outdated technology and lack of availability of start-up funds for the new ventures and sought the help of the Government for establishment of a separate cell on SMEs.
He also highlighted the associations’ participation in the proposed industry meet at Chamrajnagar for the development of the district to attract other state investors in the district.