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VAT reduction in India benefits Afghan dry fruit exporters

AT Monitoring Desk-KABUL: Afghan dry fruit exporters are looking for a profitable season as the state government of India’s Punjab has brought down the value-added tax (VAT) at 4.95 percent.

According to the Tribune News Service of India, the decision has been widely welcomed by the dry fruit traders of Punjab as it has brought the traders at a level playing field with their counterparts in New Delhi. Traders in Delhi were enjoying the benefit earlier.

Afghanistan is a major exporter of red raisin, hard almond, pomegranates, licorice root, carpet, saffron, precious stones, watermelons, fresh apples and grapes to India.

Before the eighties, Amritsar dry fruit market was the leading market in India. Terrorism in Punjab province and change of political situation in Afghanistan has passed the benefits to Delhi.

The Indo-Foreign Chamber of Commerce (IFCC), which took up the matter with the provincial government, has welcomed the decision.

The IFCC president, BK Bajaj, thanked the deputy chief minister Sukhbir Singh Badal and Revenue Minister Bikram Singh Majithia for bringing down the VAT.

He said that members of the IFCC had held a meeting in February 2015 with Cabinet Minister Majithia over the issue. They apprised the minister about the tax disparity between the National Capital and Punjab during the meeting. The rate of VAT in Delhi is 5 per cent while the same in Punjab is 6.05 percent. He said as a result most trade was growing in Delhi while it was static in Punjab.

Bajaj claimed that brining parity in tax would translate in 30 percent growth of trade in the province.

The Tribune adds: Amritsar is well connected by road to Afghanistan via Pakistan.

In order to facilitate swift exchange of cargo a state-of-the-art dry land port is already operational at the Aattari-Wagah Joint Check Post, being managed by border guards on the India and Pakistan sides. A similar trade facilitation centre is expected to come up across the border in Pakistan.

Besides, Afghanistan is a Central Asian country, which shares boundary with three of the five other countries. These three nations sharing boundary with Afghanistan are Turkmenistan, Uzbekistan and Tajikistan, besides it also has its boundary with Iran and China. The remaining two Central Asian countries are Kazakhstan and Kyrgyzstan.

Merchandise, especially dry fruit and vegetables, are already traded between Afghanistan and India via the land route.

IFCC secretary Tarlok Singh said, “Quality infrastructure like international airport and dry port must be utilised to bolster the centuries old dry fruit trade. For this reason, a trade centre is situated in Majith Mandi and surrounding by-lanes of the walled city.”