The Hindu Business Line : Traders down shutters, demand VAT postponement

TRADERS on Monday demanded the immediate postponement of the value added tax (VAT) introduction date, stating that the VAT design in the present form was not acceptable to the trading community.

The nationwide trade bandh called on Monday by Bharat Udyog Vyapar Mandal and Confederation of All India Traders (CAIT) evoked a strong response and paralysed trade in many parts of the country.

States are gearing up for a VAT regime that would replace the sales tax system from April 1, 2005. Even as traders continued to press for deferment of the introduction date, India Inc and apex industry associations said that VAT should be implemented from April 1 without any further postponement.

"We may even go for an indefinite nationwide strike if our demands are not met. I have requested Dr Asim Dasgupta, Chairman of the Empowered Committee, to convene a meeting of the joint committee before February 27 to sort out the differences," the Secretary General of CAIT, Mr Praveen Khandelwal, told Business Line here.

The Empowered Committee of State Finance Ministers on VAT had set up a joint committee that included representatives from trade and industry. The joint committee enabled the trade and industry to submit its views on VAT implementation.

Mr Khandelwal highlighted that more than 10 States are yet to frame their VAT laws and more than 20 States are yet to come up with their rules. "We still do not have the rates that would be applicable for the 550 items. This shows that States still have differences with each other on the rate issue," he said.

The CAIT Secretary General said that trade leaders from across the country are to meet at Jhansi on February 27 and chalk out plans for the proposed five VAT Rathyatras that would be taken out from different parts of the country during the first week of March and finally assemble at New Delhi.

He also said that traders would observe a day-long "hunger strike" on March 17 in all States up to the district level and would handover a traders' charter on VAT to district collectors, respective State Finance Ministers and Chief Ministers and other tax authorities.

Reacting to the traders' call for deferment of VAT introduction date, the President of the Federation of Indian Chambers of Commerce and Industry (FICCI), Mr Onkar S. Kanwar, described as "unfortunate" the apprehensions of the traders that the introduction of VAT would lead to inflation and complexity in complying with procedural requirements.

VAT, he said, is a fiscal innovation of the 21st century and 20 million people working in the industry are eagerly looking forward to its introduction.

Stating that VAT must be implemented from April 1, 2005, the President of the PHD Chamber of Commerce and Industry (PHDCCI), Mr K. N. Memani, said that VAT would certainly improve the competitiveness of Indian industry.

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