The Hindu Business Line : AP for consensus on VAT structure

THE State Commercial Taxes Minister, Mr K. Ramakrishna, favours a consensus among various States on the basic structure proposed under the Value Added Tax (VAT) regime. The State would oppose any move to include another tier in the proposed tax structure as it would not be viable.

Addressing newspersons at a meeting of Deputy Commissioners of Commercial Taxes here on Thursday, the minister said that several States including Andhra Pradesh, Tamil Nadu and Karnataka were against the proposal to introduce a new tax rate of eight per cent in the already agreed tax structure. He expressed the hope that the Empowered Committee of the Finance Ministers would be able to thrash out a consensus on the issue.

The State Government has sought a compensation of Rs 1300 crore for the Commercial Taxes Department towards the potential tax differential that could come up due to VAT regime implementation in the first year of its deployment. A technical committee at the Centre is addressing the matter and a decision would be taken in this regard, he explained.

"The State Government has set a target of Rs11,200 crore from the commercial taxes this year, which reflected a growth of about 22 per cent over last financial year. We are confident of achieving this target given the performance of the department in the first quarter this year, which showed a 20.33 per cent growth. This growth was likely despite the fact that the State recorded 9 per cent growth in tax collection over the last three years. There are different patterns for rural and urban areas, and the growth rate was about 20 per cent in the rural areas and 25 per cent in the urban areas," he said.

The Government plans to recruit about 120 commercial tax officers shortly to fill up the vacant slots. This was necessitated as the recruitments did not take place for several years. On the CAG's remarks on the CT Department's functioning, the minister said that a comprehensive review would be taken to take stock of the situation.

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