Monday, March 28 2005 21:03 Hrs (IST) - World Time -

New Delhi/ Lucknow: With just three days left for States to switch over to Value Added Tax (VAT), a leading traders body has called for nationwide strike from tomorrow to protest against the new tax regime.

Repeated attempts made by Empowered Committee chairman Asim Dasgupta failed to pacify the trade bodies. He also could not persuade reluctant states like Uttar Pradesh, Tamil Nadu, Rajasthan, Gujarat, Madhya Pradesh, Chhattisgarh and Jharkhand for implementing VAT from April 1.

Dasgupta flew to Lucknow for meeting Uttar Pradesh Chief Minister Mulayam Singh Yadav this morning but failed to persuade him. Yadav stuck to his earlier stance of not implementing VAT in his State unless traders give consent.

While Confederation of All India Traders (CAIT) stuck to its call for a three-day nationwide strike from March 30, the Akhil Bharatiya Udyog Vyapar Mandal (ABUVM), along with chemists and petro-dealers' association called for 'Bharat Mahabandh' during March 29-April 1.

While some issues had been sorted out at the meeting, there were other aspects which still needed to be addressed, Yadav said, adding "unless the traders give their consent in favour of VAT, we would not implement it."

Dasgupta assured the Chief Minister that there was not much ground in the objections raised by traders against VAT and with some discussion, the problems could be sorted out.

He said the objection that small traders would be affected was already removed as the threshold limit for imposition of VAT has been raised to Rs 10 lakh and the tax rate has been slashed from 1 to 0.25 per cent for traders having a turnover of Rs 10-50 lakh.

Addressing CAIT members last night, Dasgupta said, "The consistent demand of traders and in larger interest of consumers, all types of foodgrains will be exempted from VAT."

Not heeding to the assurance of VAT panel, trade bodies maintain that VAT cannot be implemented in the present form as it would lead to undue harassment of traders and push up prices of essential items.

CAIT secretary general Praveen Khandelwal told PTI that these concessions were nominal and the organisation has not changed its call for a three-day countrywide strike against VAT from March 30.

Akhil Bharatiya Udyog Vyapar Mandal convenor Sandeep Bansal claimed that all small and big business establishments would remain closed and trading activities and transport services would be affected from March 29 to April 1.

He said the bandh was being supported by chemists and petrol dealers' associations also.

However, in view of the markets remaining closed for Holi, essential commodities have been allowed to be sold tomorrow, he said.

The nationwide strike call comes in the wake of majority of States committing themselves to implement VAT from April.

At least 21 States are ready to introduce VAT after the Empowered Committee announced major relief for traders and Finance Minister P Chidambaram assured States of full compensation for revenue loss in the first year and phase out of Central Sales Tax in three years.

The Empowered Committee of State Finance Ministers announced cut in tax rate from 1 to 0.25 per cent and doubling of the exemption limit to Rs 10 lakh for small traders, and agreed to "review" the VAT rates on a number of items after June.