Coimbatore Compressor Industries’ Association has appealed to the State Government to provide required clarifications regarding classification of industrial air compressors for levy of commercial tax.
According to association president M. Raveendran, these compressors are now under the capital goods category.
The manufacturers are facing problems because of this and the Government should come out with a solution for the industry as it has done for bore well air compressors in the State budget.
Coimbatore, which is a major air compressor manufacturing centre, has about 200 compressor manufacturers and nearly 300 units that make components or take up machining work. Bore well air compressors attracted 14.5 per cent Value Added Tax for several years now. Till 2011, there was a clarification from the department that benefited the manufacturers.
However, recently the commercial tax department started insisting on 14.5 per cent VAT and the State budget on Wednesday said that these compressors will attract only five per cent VAT. With higher VAT, the profitability of the units was affected.
Welcoming the announcement, Mr. Raveendran said the issue related to industrial air compressors should also be addressed by the Government at the earliest.
