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SAI INTERNATIONAL SCHOOL
CLASS-XI

Sub: Business Studies
Chapter 9: Internal Trade
Topic: Role of Commerce and
Industry Associations and Documents Used in Internal Trade
(LESSON NOTES - 46)

Commerce and Industry Associations

Associations of business and industrial houses are formed to promote and protect their common
interest and goals. Many such associations have been formed and are present in the country such as
Associated Chamber of Commerce and Industry (ASSOCHAM), Confederation of Indian Industry (CII) and
Federation of Indian Chambers of Commerce and Industry (FICCI). These associations or chambers act as
the national guardians of trade, commerce and industry. These associations have been playing a
catalytic role in strengthening internal trade to make it an important part of overall economic activity.

The Chambers of Commerce and Industry interact with the government at different levels to reorient or
put in place policies which reduce hindrances, increase interstate movement of goods, introduce
transparency and remove multiple layers of inspection and bureaucratic hurdles. Besides, the chambers
also aim at erecting sound infrastructure and simplifying and harmonising the tax structures. The
interventions are mainly in the following areas:

(i) Interstate movement of goods: The Chambers of Commerce and Industry help in many activities
concerning interstate movement of goods which include registration of vehicles, surface transport
policies, construction of highways and roads.

(ii) Octroi and other local levies: Octroi and local taxes are the important sources of revenue of the local
government. These are collected on the goods and from people entering the state or the municipal
limits. The Chambers of Commerce try to ensure that their imposition is not at the cost of smooth
transportation and local trade.

(iii) Harmonisation of sales tax structure and Value Added Tax: The Chambers of Commerce and Industry
play an important role in interacting with the government to harmonise the sales tax structure in
different states. The sales tax is an important part of the state revenue. A rational structure of the sales
tax and its uniform rates across states, are important for promoting a balance in trade.

(iv) Marketing of agro products and related issues: The associations of agriculturists and other
federations play an important role in the marketing of agro products. Streamlining of local subsidies and
marketing policies of organisations selling agro products are some of the areas where the Chambers of
Commerce and Industry can really intervene and interact with concerned agencies like farming
cooperatives.