The Andhra Chamber of Commerce and Industry has demanded that the Government initiate immediate measures to slash down the 14.5 per cent VAT imposed on diesel generators to 5 per cent.

In a letter addressed to the Commissioner, Commercial Tax Department, the Chamber president M. Murali Krishna and secretary Prasad R.K. Chukkapalli said increased VAT on generators had added to the financial woes of commercial establishments and industrial units which were already under tremendous financial pressure due to power-cuts.

They said G.O No. 45 released last week, envisaged increase of VAT on diesel generators from the existing 5 per cent to 14.5 per cent. Only portable generators were exempted from the hike, they pointed out, expressing serious concern over the huge financial burden it would impose on trade and commercial establishments.

They said units that had booked generators only some time back when 5 per cent VAT was in vogue were being denied supply of the product by manufacturers for the old rate. Foreseeing more trouble on the power supply front in the approaching summer season, many trade and commercial establishments had booked generators but the increase in VAT has left them high and dry, they bemoaned.

Pointing out that in 2009, keeping in view the welfare of the trade and commercial establishments, the Government had slashed 14.5 per cent of VAT to 4 per cent, they said later, this was hiked to 5 five per cent. “But the latest move of the Government would adversely affect the interests of the stakeholders,” they said.

They said it was unfortunate that the Government had failed to ensure adequate power supply to the trade and commerce sectors but now, it resorted to measures that were bound to hurt these sectors.

They said the Government, without any further delay, must roll back the hike in VAT.

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