Guwahati: The Confederation of Nagaland Chamber of Commerce and Industry (CNCCI) has voiced concerns over specific taxation and collection practices implemented by Urban Local Bodies (ULBs) in the state, urging a cautious approach to avoid conflicts with existing state and central laws.
In a detailed statement on Friday, the CNCCI, which represents the state’s business community, affirmed its willingness to cooperate with ULBs but emphasized the need for clarity and adherence to legal frameworks when imposing taxes. The organization highlighted the importance of reviewing taxation and licensing practices to prevent monopolistic control, price hikes, and syndicates—issues that have plagued the system in the past.
“While it is the mandate of ULBs to issue trade licenses, collect sanitation tax, and impose rent on their assets, other collections need to be thoroughly examined before imposition, as they may directly conflict with GST law, state government orders, and promote monopolies through licensing raj,” the CNCCI stated.
Licensing practices and monopoly concerns
The CNCCI pointed out that previous ULB administrations had introduced a licensing and lessee system for various goods across Nagaland. This system, according to the CNCCI, allowed a few business houses to monopolize the trade of certain commodities, leading to artificially inflated prices.
A major concern raised by the Confederation of Nagaland Chamber of Commerce and Industry (CNCCI) is the imposition of certain taxes that may contradict the Goods and Services Tax (GST) law. The CNCCI emphasized that Urban Local Bodies (ULBs) should refrain from collecting taxes already subsumed under GST.
“The GST law has subsumed all taxation on goods, and therefore all forms of entry tax or transit pass on goods and items are illegal,” the CNCCI stated, referencing the state government’s compliance with the GST Council. It further clarified that the road tax paid during vehicle registration and the yearly renewal of road tax by commercial vehicles cover tolls incurred on roads.
The organization warned that setting up collection gates on national and state highways, as well as international roads, violates both GST law and existing road tax regulations. To support its claim, the CNCCI cited state government orders explicitly banning the collection of additional taxes on items under GST by town and municipal councils. The statement also referenced a May 2022 state government order banning all collection gates except for inter-state check gates.
Objections to leasing out taxation rights
The CNCCI expressed strong opposition to the practice of leasing out taxation and collection rights to third parties, arguing that this system often results in misuse, including the forceful collection of more than the prescribed rates, which burdens the business community.
“ULBs, as an arm of the state government and a public body, cannot hand over their exclusive rights to collect taxes to individuals or third parties,” the CNCCI argued. It pointed out that past incidents of leasing these rights have led to misuse, with ULBs forcefully collecting more than the prescribed rates, harassing the business community.
Issue of rate fixation
The CNCCI has directed its District Chambers to prevent individuals, businesses, or households from participating in rate fixation with ULBs, as they may not fully understand broader market dynamics and could mislead ULBs, causing financial losses for businesses and consumers. The organization stated, “The District Chambers should ensure that rates are fixed by ULBs in consultation with District Chambers.”
The CNCCI also called on ULBs to consult with District Chambers before setting rates for trade licenses and sanitation fees, as required by a 2021 government order. “The ULBs must consult with District Chambers when fixing market rates for any item, including trade licenses and sanitation fees, and not act unilaterally, as per government order no. CON-6/LOR-II/2006(Vol-I) dated 14th Sept. 2021,” the CNCCI stated.
Concerns over parking and toll taxes
The CNCCI also addressed the issue of parking and toll taxes, asserting that ULBs should not collect such taxes on state, national, or international highways unless they take over the maintenance and management of those roads from the government.
“The citizens and business community cannot be subjected to multiple taxes in the form of road tax to the government and parking or toll taxes to ULBs on the same road,” the CNCCI said.
The CNCCI urged ULBs to consult thoroughly with relevant stakeholders before imposing new taxes or fees. The organization raised concerns over recent complaints from the business community about ULBs forcefully trying to impose monthly collections on GST items and high rates on perishable goods.
The CNCCI warned that such actions would lead to “alarming price increases on essential commodities,” disproportionately affecting common citizens. It made it clear that it would not tolerate such actions and would take all necessary steps to protect the interests of the business community and consumers. The confederation also directed its district chambers to remain vigilant and intervene swiftly should any new tax impositions be found to contradict state or central laws.
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