Following a dispute among dealers and Chandigarh Administration over the imposition of Value Added Tax (VAT) on the sale of automobiles and consumer durables, these goods are no longer being sold through the Canteen Stores Department (CSD) in Chandigarh.

This has caused not only harassment to the defence personnel but also a considerable loss in the revenues for the Excise department of the UT Administration.

The issue started over the sale of two-wheelers and four-wheelers from the CSD at Chandigarh in July. The UT Administration demanded that the payment be made at Ambala depot and the delivery of vehicles be made from Chandigarh. The dealers were, however, asked to pay 12.5 per cent VAT instead of prevailing 4 per cent in Chandigarh. Till then, the dealers were paying only 4 per cent VAT on the sales.

The administration justified the move saying that it would rationalise the VAT structure. “It is an attempt to standardise the interest rate transfer of VAT across all the states. While the dealers receive the payment against their goods from Haryana (or any other state), they pay only 4 per cent VAT applicable in Chandigarh,” said the UT Secretary (Finance) Sanjay Kumar.  

The dealers, however, protested against the hike and stopped delivering automobiles to the persons carrying authority letters from the CSDs.

Subsequently, CSDs also refused to accept the orders for these goods. The countersigning authorities like Zila Sainik Board in case of retired service personnel also stopped issuing the authority letters for these goods.

... contd.