GUWAHATI, July 6: The Assam Government’s decision to impose 5 per cent VAT on sugar has not gone down well with the Kamrup Chamber of Commerce.

In a memorandum submitted to the Chief Minister, Kamrup Chamber of Commerce (KCC) general secretary Nirmal Kumar Jain said, “The recent imposition of 5 per cent VAT on sugar and textiles will not only adversely impact the general consumers but also affect trade. The general consumers are already reeling under the prevailing high inflation and economic slowdown. They will not be able to bear the huge burden of 5 per cent VAT on an essential food item like sugar. The fact that our people are already paying high prices for almost all essential commodities as compared to other  parts of the country due to the fact that most of the commodities are brought from outside the State and this entails huge transportation charges, should be kept in mind before any decision to impose taxes on essential commodities.”

The memorandum further stated, “In these trying times when petrol prices have been hiked by Rs 7.50 per litre and there is every likelihood of imminent increase in diesel and cooking gas prices, the State Government should devise ways to give relief to the consumers by reducing taxes. Instead, if basic items like sugar and textiles are taxed, it will create more hardship for the general public.”

“The entire requirement of free sale sugar of the Northeast is met by the traders of Assam. After imposition of tax on sugar in our State, the entire business will shift to the other States of the Northeast where no such tax has been imposed. Five per cent VAT on sugar means almost Rs 200 per quintal or Rs 2 per kg. Traders will be forced out of business because the cost disparity of Rs 200 per quintal will make it impossible for them to sell their stock. Thus, there is danger of emergence of a parallel system of distribution where no revenue will be generated for the State. Also, people employed in the trade of sugar will be thrown out of employment,” stated the memorandum.

The Kamrup Chamber of Commerce has appealed to the State Government to reconsider its decision.