The Hindu Business Line : TN chamber wants meet on VAT implementation

The Tamilnadu Chamber of Commerce and Industry has urged the State Government to convene immediately a meet of trade representatives before implementation of value added tax (VAT) system from January 1, 2007.

Thanking the Chief Minister for introducing VAT Bill in the Assembly and Mr S.N.M. Ubayadullah, Minister for Commercial Taxes, for the announcement of the continuation of all exemptions under the present Sales Tax Act in the VAT regime, the chamber President, Mr S. Rethinavelu, in a statement here, has said the meet is necessary before finalising the rules to ensure smooth transition to the new tax system.

The new VAT system will benefit all concerned - the prices of several commodities would come down to the satisfaction of consumers with the maximum rate of tax fixed at 12.5 per cent, together with the scrapping of additional sales tax, surcharge and additional surcharge.

The small and medium traders with an annual turnover within Rs 10 lakh would get exempted from registration and payment of tax; the dealers with an annual turnover within Rs 50 lakh get an option either to join the VAT system or pay tax under compounding system and trade and industry would be happy as the system provides for self-assessment, obviating the need to shift their activities to other states.

Revenue setbacks

The State may suffer small revenue setbacks in the first year. However, there is an opportunity for the revenue to grow over 30 per cent on account of the self policing system built in the VAT Act, he said and added that the rules under VAT Act yet to be finalised.

Convening a high-level meeting immediately under the chairmanship of the Chief Minister along with the Finance Minister and Commercial Taxes Minister with department officials and trade representatives for discussion of the issues across the table, would help finalise the rules for a smooth transition under the VAT Act, he added.

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