A spokesman of Excise and Taxation Department said here today that State Government had issued notification for imposing four percent VAT on CSD canteen on the request of Army authorities. He said that it would not affect the interests of Army families of the State besides generating additional income to the State Government.

He said that the recommendations in this regard were received from Army and other allied organizations such as Sarvatar Canteen, Sarkaghat Canteen Stores Department, Pathankot etc. to impose 4-5 percent VAT. Decision to impose four percent VAT was taken in the Civil Military Liaison meeting which was held on 21st May, 2013 under the Chairmanship of Chief Minister. Head of Army Western Command requested in the meeting to decrease the VAT percentage to four-five percent from present 14.3 percent. On the request of Army, the State Government issued a notification on 17th August, 2013 to impose four percent VAT on CSD canteen.

He said that before this arrangement CSD Canteen was paying 14.3 percent VAT and surcharge for buying various items from other States especially from Punjab. He said that after the decision of State Government the CSD canteen now had to pay four percent VAT to Himachal Pradesh Government and two percent CST to Punjab Government. It would save 7.75 percent on the items to be purchased from CSD canteen.

He said that before this arrangement the benefit of 13.75 percent VAT and surcharge was being taken by other States especially Punjab from where the items were purchased. He said that this decision would not only benefit the State Government to earn additional income but also be beneficial for army families.