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Our Correspondent

Madurai , Jan. 18

THE Tamil Nadu Chamber of Commerce and Industry (TNCC&I) has hailed the release of the white paper on value-added tax (VAT) by the Union Finance Minister, Mr P. Chidambaram, duly incorporating a number of demands and suggestions put forth by various trade and industrial bodies including TNCC&I.

It appealed to the State Government to modify the State VAT Act on the basis of the released white paper and provide exemption to dealer up to Rs 40 lakh annual turnover under 1 per cent compounding rate to protect the interests of small traders in the State.

The chamber has also said that the continuance of the Central Sales Tax (CST) is not in consonance with the introduction of VAT. Though the white paper has accepted this in-principle and assured of a phase out, "We are dismayed and much concerned that no definite date has been fixed for its complete withdrawal," the Chamber has observed.

It has stressed the need for a lower rate of tax for goods that are important and used by the common man. In the proposed fixation, goods that do not find a place in the 4 per cent list, are necessarily required to be placed under 12.5 per cent list, which is not fair and reasonable.

The implementation will have a cascading effect on prices. This justified demand, therefore, should be considered and implemented within six months following the introduction of VAT, it has said.

The Chamber has further requested the State Government to keep in abeyance all penal provisions.

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