Shimla: Succumbing to fierce criticism by the opposition party, the government today univocally announced reducing VAT to 4 percent at army canteens in the state.
However, a government spokesman stated the notification for reducing the tax had been done so at the request of army authorities.
Facing a revenue crunch, earlier, the government had increased VAT to 14.3 percent on all CSD canteens.
The spokesman stated besides the army authorities, the tax had been reduced on the request of various canteen operating organisation in Himachal Pradesh.
The decision to reduce VAT from 14.3 % to 4 % had been taken at the Civil Military Liaison meeting on 21st May and a notification to the effect was issued on 17th August, said the spokesman.
Former chief minister Prem Kumar Dhumal who had raised the issue said, “the government earlier was in denial mode when we had questioned the move to increase VAT on CSD canteens but better sense has finally prevailed.”