The Hindu Business Line : `VAT must be made industry-friendly'

THE Confederation of Indian Industry (CII), Kerala has submitted a detailed recommendation to the State Government on the Kerala Value Added Sales Tax Bill 2002 so as to make VAT industry-friendly.

In a statement, it said that the basic premise of a VAT regime is to avoid cascading effect on tax, ensure transparency and create a customer-friendly tax administration.

Keeping this in view, input tax credit should be allowed on fuels, consumables stores, capital goods and branch transfers.

CII also said that the provision for re-registration of existing dealers was a regressive step.

"Collection of registration fee without quid pro quo is unjustified. The State should encourage more people to obtain registration and the provision for renewal of registration every year must be deleted."

Besides, it called for doing away with reverse tax and special additional tax.

The draft schedule should be on homogenous system of nomenclature (HSN) and should be drawn like the one under the Central Excise Act.

CII also urged the Government to continue the special rate of tax to the small-scale sector and the incentives to eligible manufacturing units through deferment method and permit remission.

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