The Hindu Business Line : VAT: AP Govt promises efficient refund mechanism

EVEN as dealers and consumers are grappling with the VAT regime that came into force on Friday, the Andhra Pradesh Government has promised that it would work on an efficient refund mechanism, the key component of the new tax system.

Speaking to newspersons after releasing the VAT Act on Friday, Mr Konathala Ramakrishna, Minister for Commercial Taxes, said that the Government would evaluate the system and evolve a mechanism to eliminate lock-in period of refunds.

Mr Ramakrishna had put that the lock-in period at 6-7 months initially.

"The whole system hinges on the refund mechanism. But there is a prejudice that this department (Commercial Taxes) would never refund. We will have a mechanism put in place to ensure timely refund," he said.

He added that there was no rationale behind some States not joining the VAT system. "In fact, industry in those States will suffer in the absence of input tax credit. They will soon join the system."

Terming the shift to the new system as historic, he said that it would ultimately lead to a centralised single taxation mechanism throughout the country.

"In the backdrop of globalisation, it is high time we rationalised the tax structure."

Admitting that there were anomalies and hurdles, he said that the Government would iron them out.

Assuring industry and trading community that there would no coercive measures, he said that the Government would be a facilitator.

The department has so far recorded 98,000 registrations in the VAT regime. "We are expecting 27,000 more," the Minister said.

Meanwhile, confusion prevailed over the new tax structure. While most of the consumers were not aware of the details of the slabs, traders too were unable to specify the rates.

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