The Hindu Business Line : Kerala comes up with `Lucky VAT' scheme

The Kerala Government is launching a novel scheme titled, `Lucky VAT', that is aimed at ensuring better compliance among the traders in the State with the value-added tax (VAT) system.

Under the scheme, the consumers will get a `Lucky VAT' card from the shops on purchase of items worth a minimum of Rs 1,000. The cards carry prizes ranging from Rs 10 to Rs. 1 lakh and the consumers can scratch find out whether they are lucky.

Getting lucky

The purchases are not required to be made on a single bill. The card will be available on smaller purchases made within a month for a cumulative amount of Rs 1,000.

The Finance Minister, Dr Thomas Isaac, told newspersons here on Monday that prizes up to Rs 5,000 would be available on the spot from the shops. Prizes above that will be distributed from the nearest branch of Kerala State Financial Enterprises Ltd (KSFE).

The scheme, however, will not be applicable to purchase of items such as petroleum products, steel, cement, alcoholic beverages, fruits, vegetables, milk, egg, sugar and textiles, excluding readymade garments. Also outside the scheme are items with compounded tax rates like gold and pharmaceutical drugs.

Seeking help

Dr Isaac said that the `Lucky VAT' scheme had figured at the meeting of the Empowered Committee of Finance Ministers held in Delhi recently and had generated much interest among the other states.

The Government had sought Central assistance of Rs 10 crore for an advertisement campaign highlighting the scheme and the Centre had promised to consider it favourably, he added.

The Minister noted that VAT collection in the State was around Rs 3,000 crore last year and the Government was targeting an additional amount of Rs 1,600 crore in the current year. The new scheme is part of the Government's efforts to mobilise the additional revenue.

He said that the traders were also partners in the scheme and they had put up several suggestions during the Government's interactions with their various forums. There are around 1.30 lakh traders registered under VAT in the State and the scheme is expected to attract more traders to the VAT fold irrespective of the turnover limit fixed for registration.

The Government is also considering putting together a trade package to make Kerala a `shopping destination' if the Rs 4,600 crore target for the current year materialises. This will be linked with the State's tourism development efforts and the package will be finalised in consultation with the related departments.

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