The Hindu Business Line : Govt urged to bring 14 industrial inputs under 4 pc VAT

THE Dyes and Chemicals Merchant's Association has asked the Andhra Pradesh Government to bring 14 industrial inputs, including dyes and chemicals, into Schedule 4 that attracts four per cent VAT (value-added tax).

The State had not defined `industrial inputs' anywhere in the VAT Act.

As a result all `industrial inputs', including dyes and chemicals, entered into the list of residual entry of Schedule V of the Act that attracted 12.5 per cent.

"All other States have defined industrial inputs with VAT rate at four per cent," an association spokesman said in a press release.

The association said this would result in lock-in of scarce working capital resources, thereby crippling the industry.

He said textiles processing industry, power loom and handloom sectors depended on dyes and chemicals industry.

Referring to the Government contention that it was difficult to understand vast list of chemicals, he said the argument was untenable.

"It (the Government) talks of latest e-technologies. It is not at all difficult to understand the so-called complexity of chemicals. All the organic and inorganic chemicals that are consumed in Andhra Pradesh can easily be listed," he said.

The officials could take the opinion of the industry in this regard.

If they kept `industrial inputs' in the four per cent list, the question of refunds would not arise.

The association, however, admitted that there were some in the industry who resorted to tax evasion in a big way.

He said VAT had got inherent strengths to take care of tax evasions.

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