Entry Tax in Himachal Pradesh

Entry tax in Himachal Pradesh is charged based on the Himachal Pradesh Tax on entry goods into local area Act, 2010. Entry tax is charged to all those who move goods from any other Indian state into the state of Himachal Pradesh.

Note: Entry Tax has been replaced by the Goods and Services Tax(GST) starting 1 July 2017

Entry Tax:

Entry Tax is a type of tax imposed by the state government in India. The tax is imposed on from one state to another and it is imposed by the state that is receiving the goods. The recipient state imposes the tax on the goods in order to protect their tax base. The Entry Tax Act in India was introduced in 2000. Dealers involved in business who takes delivery of goods, H.U.F members, firms, societies, clubs, industrial, commercial or trading undertaking Central are all liable to pay Entry Tax.

Entry Tax in Himachal Pradesh:

In Himachal Pradesh, Entry Tax is levied according to the Himachal Pradesh Tax on entry goods into local area act 2010. The tax is levied by the state government and paid by the state government. Every dealer who brings good worth over Rs.1 lakh in one year for the purpose of manufacture or processing of goods and dealers who bring in goods worth over Rs. 2 lakh into a local area are liable for entry tax.

Goods Exempted from Entry Tax in Himachal Pradesh:

Given below is a list of important goods that are exempted from entry tax in Himachal Pradesh.

  • Agricultural implements that are manually transported or animal driven
  • Bamboo wood products used for agricultural purposes
  • Bangles made of material other than precious metals
  • Books, periodicals, maps and journals
  • Bread
  • Charcoal
  • Handloom products
  • Chemical fertilizers
  • Cotton yarn and silk yarn in hank
  • Coarse grain other than paddy, rice and wheat
  • Unglazed earthenwares
  • Fire wood
  • Electric energy
  • Fresh fruits
  • Fresh and pasteurised milk
  • Fresh plants and saplings
  • Fresh vegetables
  • Certain plant seeds
  • Any goods sold to serving military personnel
  • Stationary such as chalk, pencils, writing slate, crayons, sketch pens, etc used by students
  • Jaggery
  • Human blood and blood plasma
  • Khadi garments

Rate of Entry Tax on Goods in Himachal Pradesh:

Goods Tax Rate
Diesel, furnace and oil lubricants 7%
Explosives 5%
Cement 5%
Iron and steel 4%
Tobacco products 4%
Goods used in work contracts including hydropower and thermal power project generations 5%

News About Entry Tax in Himachal Pradesh

  • Himachal Pradesh to levy entry tax on online sales

    Naveen Patnaik, Odisha Chief Minister urged Arun Jaitkey, Union Finance Minister to take steps immediately to compensate the state for the Central Sales Tax (CST) loss for 4 financial years, including 2013-14 to 2016-17, due to the GST rollout.

    In his statement Patnaik has mentioned that in the request that the union finance ministry do something immediately to compensate the 4 year loss. Said to be one of the most sought tax reform since Independence, India is looking to rollout the Goods and Services Tax starting from April 2017.

    The state of Himachal Pradesh is considering the levy of entry tax for online sales and the process of finalising tax slabs is underway. The tax is expected to be paid by courier services in the state, but will be eventually borne by the customers.

    The advent of online shopping has been beneficial to big businesses and manufacturers, as they are not required to pay tax for this mode of retail. Small-time retailers have taken a blow, along with the state government that is suffering a loss of Rs. 200-250 crore in revenue annually due to online retail. The introduction of entry tax is expected to augment the state government’s revenues from tax.

    The displeasure expressed by the local business community had been followed by the passing of the Himachal Pradesh Tax on Entry of Goods (Amendment) Bill 2016 in April. However, this tax has not been imposed till now. According to sources, the state government intends to impose an entry tax of 5% on all online sales. The final decision on this is known to be pending.

    The implementation of the GST will be beneficial to consumer states like Himachal Pradesh, as it will provide a uniform tax structure. The state is preparing for the introduction of GST by imparting training to concerned officials.

    25 October 2016

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