Friday, June 10, 2011

What is E-Sugam (State Industrialists find 'e-sugam' not so 'sugam')

The ‘e-sugam’ online filing, introduced by the Commercial Taxes Department, Government of Karnataka, has not been getting a positive response from traders and industrialists who have finding it a ‘miserable’ experience going through with the process.

E-Sugam process, introduced by the department under the Karnataka Valude Added Tax (VAT) Act 2003, replacing Form 505 and certain limits of Form 515, is a mandatory formality of informing the department regarding movement of goods before it reaches check post. This has to be done on net, like “e-filing”, on the proforma put out on the Department’s website.

This came into effect from last February and will be strictly enforced from April.

Finding physical production and verification of the documents consume time and cause delays at the time of checking, e-sugam is introduced in the state, according to the Department’s notification. However, the Department seems to have overlooked the traders’ and industrialists’ angle. They feel the process is difficult and a nuisance. Consequently, it is affecting their business.

Narrating the difficulty they are experiencing after introduction of ‘e-sugam’, Hebbal Industrial Estate Manufacturers’ Association Secretary C M Subramanian said, “Job workers depending on customers from Hosur and Coimbatore were getting material during nights. They were sending the proceed material up to 2nd shift production. Now, the concerned clerk has to call the job workers in midnight and wait to get the sugam number. Till the number is given the dispatch has to wait.”

“In view of delay and nuisance, customers have begun diverting jobs to local vendors in Hosur. As a result, job workers here have lost around 60 per cent of business. Units in Bangalore, for example, had dedicated 90 per cent production to Hosur customers. All these job workers are facing serious problems after e-sugam came into effect.”

“E-sugam is making life miserable to most of the trade and commerce,” said industrialist J R Holla adding it may prompt the service industries to move out of the state instead of facing hassles in Karnataka.

Referring to Part C of the notification relating to information to be provided by the consignee on the goods received from out of the State, he said it is impossible for the consignee to get all the information in time and accurately from the consignor before the dispatch of goods. The consignor who stays in some other State may not take serious interest in providing all the information in time, accurately and completely. Under the notification, it is the consignee who will be held responsible for wrong or inaccurate information and is liable to be penalised.

On time limit for the e-sugam filing, Holla said e-sugam will have time vailidity depending on the distance of the consignment booked. However, it will not be in consignee’s control to tell how long the consignment will take to reach the check post. This may depend on many factors like road conditions, condition of the goods vehicle, the staff, distance to be covered, law and order situation, weather condition, accidents, etc .

The worried industrialists expressed hope that the government would act immediately and protect the interests of trade and commerce in Karnataka.


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