Kanpur : In September this year the UP state government had reintroduced two percent entry tax on IT products, but channels across the state are facing confusion over the levels at which the tax is being imposed.

According to channel partners in the state, it is not clear whether the entry tax is levied at single point when the billing is done by the national distributor or at multiple points where the tax is levied at every stage as it gets distributed from national distributor to sub distributor to resellers.

Entry tax is once charged when the stock is first shipped from another state to UP. The confusion is over the lack of information over whether additional entry tax of two percent is levied every time the stock is billed from one municipal to another within the state.

Channel is also predicting that if the pressure on government continues to grow and confusion prevails, the entry tax will be withdrawn from the taxation system.

Rohit Kohli of Kanpur-based Comexcell Technologies shared that though entry tax has been imposed, it needs more clarification from tax officials as to what are the various criteria and levels at which it is being imposed.

"There are a lot of differences in tax policies from region to region in UP and we are yet to get clarity from tax officials. For instance, it is not yet clear whether the tax is being charged from one municipal to another or whether it is uniform across the state," he shared.

"The biggest confusion is that we are not sure about the levels at which it has to be levied. Our local taxation department is also not sure of the correct policy. Even they lack clarity as according to tax official in Allahabad the entry tax is levied in multi-points whereas those in Lucknow have been saying that it is levied at single point only. According to my calculations, if I start paying entry tax at every level, I will end up paying Rs 3.5 lakh as entry tax only per month, which just does not make sense," shared Manish Mehrotra of Allahabad-based Tritech Enterprises.

Till now, the channel partners in UP are not charging anything extra from the customers and are following the tax payment at single point only. Mehrotra informed that UP Computer Dealers Welfare Association (UPCDWA), the state level IT association would approach the tax officials to discuss the issue.

Dharmendra Gupta of Lucknow-based Nesco informed that very soon the government will withdraw entry tax and will replace with it with Special Additional Tax.

Page(s)   1