The Hindu Business Line : AP traders, officials debate VAT

AS the VAT regime approaches, small traders and dealers wonder how it would be like in the new system. Would items like pens, refills, notebooks and compass box come under VAT? If yes, would they form part of `writing material' in Schedule 4?

How often would they be subjected for inspections? Is VAT confined to just sales? Would stocks attract it?

A large number of traders gathered at a VAT awareness programme and fired a volley of questions at senior officials of Commercial Taxes Department.

The programme was conducted by the Hyderabad General Merchants Association.

Mr T. Vivek, Joint Commissioner (Programme Management Team), who played a key role in preparing the State for VAT, likened VAT with an express train.

The old regime (sales tax) was an overused train. It is not like boarding another train. We are shunning an old train to get on to the new express train. VAT will reduce burden on consumers, improve revenue collections and enhance competitiveness of the industry in global market," he said.

He, however, added that it would take time to understand well the nuts and bolts of VAT.

"But when we changed to a new system, we should try to understand it. Shying away from it would do no good."

In the absence of a nation-wide tax regime, traders and consumers are subjected to a system where taxes cascaded. "It was like a pyramid." VAT would remove these anomalies.

According to him, the new regime would drastically reduce inspections. "An audit system would be put in place soon. We will go selectively and audits would be conducted only after taking appointments with the traders concerned," he said.

Taking a cue from the Income-Tax Department, the Commercial Taxes Department is working on a system to selectively pick traders for audits.

"There are 3.7 crore IT assessees but only five per cent of them are subjected to scrutiny," said Mr Mohammed Imtiaz, Assistant Commissioner (Charminar Division). VAT is tax on sales and not on stocks, he added.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page