Bengal gets thumbs-up from HSBC on entry tax

Kolkata, April 12 (IANS) The West Bengal government Thursday got the thumbs-up from British banking company HSBC for its move to reintroduce 'Entry Tax' on goods.

The West Bengal Tax on Entry of Goods into Local Areas Bill, 2012, was passed in the state Legislative Assembly recently for the reintroduction of "entry tax", on goods after nearly two decades.

The tax may be imposed on movement of goods entering West Bengal from other states as well as movement of goods within the state.

"Entry tax is a good way to raise taxes (revenue)... Bengal is doing it now. Others states have it... it will be done (in Bengal) in electronic way," Naina Lal Kidwai, Country Head India, Director HSBC Asia Pacific, told reporters here.

State Finance Minister Amit Mitra told the state Assembly that entry tax would be charged at flat one percent and it would be collected like VAT.

Kidwai, however, said proper implementation of the tax would be the key.

"I think these are very interesting ideas, which are also calls for proper implementation... it does not stop at the idea," she said.

"At the end of the day it is a right idea as the country level we have to raise tax revenues. Bengal should be looking at the ways to raise its revenues as there are issues like servicing the debt," Kidwai averred.

The state government has to pay Rs.22,000 crore per year as interest and part of the principal on account of servicing the its huge debt of more than Rs.2 lakh crore.