Dimapur Chamber of Commerce and Industries (DCCI) said it was deeply concerned with the prevailing state of affairs in the state’s commercial hub where the business community was facing immense difficulties and hardships due to the unregulated and unjustified taxation regime that had been in existence for years together.
In a communiqué, DCCI highlighted the plight of the business community which was in double jeopardy due to the prevalence of multiple taxations, and the practice of double taxation by the municipal authority, which had brought the entire business ecosystem to doom.
The trade body said it was pained to come across the system where GST regime on the one hand was squeezing out a major chunk of business proceeds from the already exhausted and exploited business community, while DMC on the other hand had been imposing unregulated taxes and fees upon several businesses.
In this context, DCCI said it was compelled to point out various forms of collections, taxations, and fees being imposed by the municipal authority on businesses and services that are already subject to GST. The DCCI argued that this double taxation is unjustified and illegal.
DCCI cited the collection of lakhs of rupees in taxes from second-hand clothes, which fall under GST regulations, adding that DMC was charging Rs 1,000 per month from every shop and agency as a regulation fee. Recently, it said that DMC also levied a one-time payment of several lakh rupees from shops selling decorative items in anticipation of the festive season.
Furthermore, DCCI noted that while DMC was not fixing rates for perishable items that do not fall under GST, it was still imposing random taxes on these products.
Citing an instance, DCCI said DMC collected Rs 500 from each Tata Mobile transporting tomatoes and subsequently charged Rs 3 per kg of tomatoes upon arrival at the market. DCCI raised concerns that rates for other perishable items, such as potatoes and onions, were also not fixed, leading to arbitrary tax collections. This lack of established pricing leaves consumers vulnerable to vendors who set their own rates, it added.
Under such a scenario, the trade body pointed out that DMC, which was responsible for rate-fixing and controlling prices, was encouraging syndicate system, and ultimately the people were at the receiving end since they were directly or indirectly adversely affected by fluctuation in prices.
DCCI cited Part-IV Chapter -1 of the recently-enacted Nagaland Municipal Act, 2023 that provided for the power to impose taxes in Section 124.
DCCI said it was utterly disturbed by the non-adherence of the provisions of the Municipal Act in letter and spirit, and the completely unregulated manner in which the DMC was imposing multiple taxes upon the business community.
It further pointed out that despite a standing government notification dated November 16, 2021 that “collection of any kind of tax/fees on items/goods that comes under the Goods & Services Tax (GST) regime shall be immediately stopped by all Municipal and town Councils across the State of Nagaland,” DMC was imposing unregulated taxes, fees, etc, in complete violation of the government notification.
Hence, it termed these unregulated activities as illegal and unacceptable, requiring prompt redress. DCCI cautioned that if this trend continued in Dimapur, it would have a cascading effect in all districts of Nagaland, adding that the public should also be aware that any taxation directly or indirectly was borne by the common citizens.
Since the town and municipal councils were under the state government, the trade body demanded they should function as per the Municipal Act and try their best to ease the burden of the public.
It also urged the government to take prompt action against any town or municipal council functioning otherwise. Further, DCCI asked the DMC to immediately stop summoning in groups businessmen or dealers of various trades and products, insisting that the business community should not be victimised for no fault of theirs.