The Confederation of Nagaland Chamber of Commerce and Industry (CNCCI) appreciates the pro active role taken up by the newly elected ULBs to improve our towns and municipalities, and CNCCI on behalf of the business community has expressed its full cooperation and support.
However, the CNCCI would like to set the records straight to the ULBs on taxation and collections. While it is the mandate of the ULBs to issue trade license, collect sanitation tax and impose rent on their assets, other collections needs to be thoroughly examined before imposition as it can directly come in conflict with GST law, state government orders and promote syndicate and monopoly through licensing raj.
1. It may be noted that the previous ULBs dispensation set a trend whereby a licensing and lessee system was introduced on various goods and items across Nagaland giving exclusive right to individuals or few business houses, which led to monopoly and syndicate System in many commodities.
The direct end result was price escalation of commodities as prices were fixed by the monopolist and syndicate further those lessees took cuts/commission/share by means of forcefully collecting over and above prescribed rates in permit/ license. The CNCCI makes it very clear that such a system will not be tolerated and all means will be explored to stop such undemocratic, unethical practices.
2. The ULBs are further informed that collection of taxation and setting up of collection gates on National, International and state Highway are against the GST law and road tax paid to the government.
a) The GST Law has subsumed all taxation on goods and therefore all forms of entry tax/ transit pass on goods and items are illegal ( as the state government is party to GST Council through accession to GST law).
b) The road tax paid during vehicle registration and yearly renewal of road tax by commercial vehicles cover the toll incurred on roads by the vehicles.
The CNCCI appeals the ULBs to kindly refer to the following orders and laws before taking any decision in order to avoid legal and unpleasant friction:
a) The GST law has subsumed all forms of entry tax.
b) The state government order no. CON-6/LOR-II/2006(Vol-I) dated 14th Sept. 2021 banning all forms of tax/fees on items/ goods that come under GST by town councils and municipalities as demanded by the CNCCI.
c) The state government order dated 1st May 2022 which banned all gates except inter state check gates which includes gates set up by Town Council, Municipal Council, Government Departments.
3. On collection of parking tax and toll tax the CNCCI would like to make it clear that the ULBs should not collect such taxes on State, National and International Highway even within towns and municipal areas unless the ULBs takes over those roads from the government and the ULBs start maintaining and managing, the citizens and businesses community cannot pay multiple taxation in the form of road tax to the government and parking/toll tax to ULBs on same road.
4. The CNCCI have recently come across certain circulars of leasing out various collection and taxes to individual party. This is totally unacceptable and unappreciated for following facts:
a) The ULBs as an arm of the state government and constitutional and public body cannot give away its exclusive rights to collect taxes and taxation to individuals or third party.
b) In the past such leasing out of rights to impose collection and taxation has resulted in misuses by forceful collection of more than prescribed rates by ULBs thereby harassing the business community beyond limit.
c) over and above the revenue generated through lessee or third party in the past has incurred heavy fiscal losses to the ULBs as most of the lessee submits the revenue well below the fixed amount by the ULBs, thereby affecting the public services.
5. The CNCCI directs the District Chambers that individuals, business man or houses under any circumstances be allowed to involve in rate fixation with ULBs as individual often is not aware of the broader picture of the market thereby could potentially misguides the ULBs in price fixation which will lead to incurring huge losses by the business community likewise consumers affected. In this connection the District Chambers should ensure that rates are fixed by ULB in consultation with District Chambers.
The CNCCI also urged the ULBs to ensure market rate fixation on any item and goods including trade license and sanitation fees are done with thorough consultation with District Chambers and not unilaterally by ULB as per government order no. CON-6/LOR-II/2006(Vol-I) dated 14th Sept. 2021. The appeal is made in the interest of ULBs, Business Community and Consumers and to maintain cordial relationships and a supportive business community.
The CNCCI has recently received complaints from the business community that certain ULB are forcefully trying to impose monthly collection on GST items and high rates on perishable items monthly, per load and per kg. The CNCCI warns that there will be abnormal and alarming price increases on essential commodities that will deeply affect the common man. The CNCCI makes it clear that it will not allow brazen acts under any circumstances but go all out to safeguard the business community and consumers.
In this connection, the CNCCI further directs the district chambers to be vigilant on imposition of new tax and collections which is in direct confrontation of various State Government orders and Union Government Laws and initiate swift intervention and further flag the issue to the CNCCI, so that precedence are not created across ULBs in Nagaland which could affect business community and consumers.
(Dr. KHEKUGHA MURU)
Chairman
(Dr. SEYIEVILIE MOR)
General Secretary