The Hindu Business Line : Traders' threat to intensify stir against VAT in Kerala

VAT TROUBLE? A lorry arrives at Ernakulam main market with a cargo of onion and potato from Pune on Monday. Despite the strike threat by traders' organisations and pleas not to take fresh supplies of grains and provisions, the market functioned as usual. - H. Vibhu

Thiruvananthapuram , March 28

REITERATING its demand that value added tax (VAT) should not be introduced in the State from April 1, the Kerala Vyapari Vyavasayi Ekopana Samiti (KVVES) has resolved to go ahead with an agitation against the proposed tax regime.

Addressing a press conference in the city, Mr Peringamala Ramachandran, District President, KVVES, said the traders' body would spearhead a 72-hour, State-wide traders' strike from March 30. Demonstrations against VAT will be organised across Kerala on March 30, and the striking traders will lay siege to the State Secretariat on April 1, he added.

Till March 27, only five States — Haryana, New Delhi, Karnataka, Kerala and West Bengal — have passed the legislation required to implement VAT, he said. So although 25 States have agreed to introduce VAT from April 1, only a few of them will actually implement VAT from this date, Mr Ramachandran added.

The organisation is ready to defer its agitation if the State Government is willing to put-off the introduction of VAT by six months to see how many States actually implement the tax, he explained. Urging the Kerala Chief Minister, Mr Oommen Chandy, to intervene in the matter, Mr Ramachandran said the Government should set up a committee — with representatives of traders, political parties and officials — to look into all aspects of VAT.

However, if the State Government sticks to its decision to implement VAT from April 1, the executive committee of the KVVES will meet on April 1 to chart out the organisation's plan of action, he added.

The implementation of VAT will cause many practical difficulties for most small and medium-sized retailers, he said. Of the 10.5 lakh traders in the State, only around 1.2 lakh are registered with the sales tax authorities.

Of these 1.2 lakh retailers, only 20,000 are actually required to pay sales tax under the existing rules, he added.

Taking note of this aspect, the Government should exempt all small and medium traders from VAT and at the same time turn it into a single-point tax, he emphasised.

As part of their agitation, both wholesalers and retailers in the State have stopped procuring fresh stocks of various commodities. Hence, most shops in Kerala will run out of supplies in the next few days, he pointed out.

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