Huge Tax May Hit Business Hard

Published: 19th September 2014 06:06 AM  |   Last Updated: 19th September 2014 06:06 AM   |  A+A-

KOZHIKODE: As the state government has decided to levy more tax to tackle the financial crisis, following the implementation of the new liquor policy, the traders in Kuttikattur have concerns that the burden of tax may hit the industry hard.

“Right now, the traders pay 14.5 per cent of Value Added Tax when they buy timber from merchants who do not have registration in the state. This has led to a price hike and the timber merchants are finding the going tough. The merchants are hence forced to adopt  illegal methods so as to avert the tax burden”, says a trader, who requests anonymity.

The traders also complain that the state government has not done anything to facilitate the industry here. But in Tamil Nadu and Karnataka, the governments are very friendly to traders and there is no tax weight like this. “The state government is harassing traders in the name of VAT by frequently changing the VAT rules. If the present 14.5 per cent VAT is reduced to four or five per cent, it will be a great relief to the traders,” says M M Salih, president of the Furniture Manufacturers and Merchants Association.

The association had submitted representations to Finance Minister K M Mani  various times demanding the reduction of VAT to five per cent, however no action has been taken so far. “In some products 15 to 20 per cent of profit is required in retail business. With the heavy tax, the traders will be forced to elevate the prices and this will affect the business,” say the traders.

The lack of skilled carpenters is another problem faced by the traders. Only a few firms have manufacturing units in Kuttikattur, but the majority of the shops have units for polishing and finishing jobs.

Hundreds of migrant labourers from West Bengal and other states are earning their livelihood by doing jobs here.

“There are many skilled workers among the migrant labourers groups and they are doing a good job,” opines Sirajudheen, director of Subaida Timber and Furniture.

The firms here also arrange transportation facility to  customers.

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