statesman news service
KOLKATA, 25 JUNE: The state government is likely to appeal to the Division Bench against the High Court’s judgment declaring unconstitutional the entry tax on commodities imported from other states since it will be a major blow to the government’s infrastructure development initiative.
According to officials of the state finance department, entry tax has helped the state to generate around Rs 1,200 crore a year. The amount acts like a special fund that is used for infrastructure development. The fund is particularly aimed at developing infrastructure, namely building roads, bridges and buildings. Upgrading market complexes and upgrading and setting up new storage facilities are also undertaken from this fund.
Thus, striking down the entry tax is likely to hamper the development initiatives of the government, an official said.
The High Court’s decision comes at a time when the state government is going through a severe financial crunch with an estimated debt burden of about a whopping Rs 2 lakh crore. Despite several requests, the Centre has neither considered the state’s demand for debt restructuring nor a three-year moratorium on interest payment to help the state tide over its financial problem.
In such a situation, a loss of around Rs 1,200 crore a year will have serious impact on the state coffers, according to sources at the finance department.
“We cannot let go of a source that helps in generating such huge funds. Since the fund is generated on compensatory ground there is no need to get Presidential assent. Moreover, many other states also levy such tax. We will appeal against the order,” a senior Trinamul Congress leader said.
The Left Front government had abolished a similar tax in 1995 after it was revealed that such tax lead to corruption at the check posts.
The state government passed the West Bengal Tax on Entry of Goods into Local Areas Act 2012 in the Assembly in March but the Opposition had raised concern as to how the government planned to tackle corruption.