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Lucknow, Feb 11: The Uttar Pradesh government, which recommended withdrawl of 1% trade tax on the turnover of over Rs 50 lakh, imposed a new tax called “state development tax” of 1% on business houses doing a business of more than Rs 50 lakh a year.
The decision to impose 1% development tax was taken by the state cabinet which met under the chairmanship of chief minister Mulayam Singh Yadav. The development tax would be for five years. But, traders dealing with business like newspapers, agricultural equipments, khadi gram udyog products and handicrafts would not be covered under the new tax. Also, raw materials for the use of registered industrial units and packing materials would not be taxed.
Earlier, CM had formed a high-level committee on the controversial issue of turnover tax. The committee was formed in the aftermath of large-scale agitations and a state-wide band organised by traders in UP against the imposition of 1% tax on the total turnover of a trader.
The cabinet admitted the decision to withdraw the tax had been taken in view of opposition by the traders. The decision to impose turnover tax had been enforced on January 24. The government was targeting to collect Rs 200 crore annually from turnover tax. The “state development tax” would now generate about Rs 550 crore, the agenda cleared by the state cabinet revealed.
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