The Hindu Business Line : TN industry seeks fine-tuning of VAT Bill

Minor alteration
Demands input tax credit for spares and components relating to capital goods
Wants the definition of `place of business' expanded to include outsourced operations
Document for claiming input tax credit should also be a copy of the invoice, not necessarily the original

Chennai , Dec. 15

The industry in Tamil Nadu, though happy with the VAT Bill, has nevertheless some issues. The industry wants the Government to give it input tax credit as soon as the assessees submit the invoice showing the sale and not necessarily after the VAT has been paid to the Government.

According to Mr S. Chandramohan, Convenor, Economic Affairs and Taxation Panel, Confederation of Indian Industry-Tamil Nadu, the CENVAT rules permit credits on the basis of invoice. He said that the State Government had verbally acceded to this request.

The industry has also demanded that spares and components relating to capital goods be given immediate input tax credit. The position of the proposed VAT Bill is that spares would be considered part of capital goods and input credits be spread over a three-year period. The industry wants the definition of `place of business' expanded to include outsourced operations. Another demand is that the document for claiming input tax credit should also be a copy of the invoice, not necessarily the original. It is understood that the Government has said `yes' to this.

Further, at present, the input tax credit is only provisional. The assessing authority has the powers to revoke the credit. "This appears to be a harsh provision," says a note presented by the CII to the Government.

Asked if the Government was not justified to keep the right to reverse a wrong claim — more so, because VAT claims are based on self-assessment — Mr Chandramohan pointed out that companies could claim excise relief under CENVAT on the basis of the invoice.

Meanwhile, in a seminar on VAT organised by The All India Skin and Hide Tanners and Merchants Association, Mr M. Devaraj, Special Commissioner and Secretary, Commercial Taxes and Religious Amendments, Government of Tamil Nadu, promised exporters that they would get VAT refunds within 90 days.

Refund in 90 days

He said this in response to a submission by theAssociation's President, Mr Rafeeque Ahmed, that in some States likeWest Bengal, exporters were waiting for tax refunds for two years and such a situation should not occur in Tamil Nadu.

Mr R. Ayyappan, Joint Commissioner, Commercial Taxes Department, noted that less than half of the 3.9-lakh sales tax assessees in the State had thus far applied for TIN numbers. He called upon the assessees to get their TIN numbers soon.

Smooth Transition

Applications for registration under VAT and for TIN numbers could be downloaded from the Government's Web site, www.tnvat.go.in, which would be operational from Monday.

He said that the Government had taken several steps to ensure smooth transition into VAT regime, that includes a call centre for giving clarifications and help desks in all districts. The call centre would begin working from Monday and would be operational between 8 a.m. and 8 p.m., he said.