The Hindu Business Line : Rubber merchants’ plea to Kerala Govt on refunds

Kochi, June 5 The Cochin Rubber Merchants Association has urged the Kerala Government to direct the sales-tax authorities to refund the excess amount deposited by the rubber dealers conducting inter-state trade.

The Association President, Mr N. Radhakrishnan, pointed out that rubber dealers conducting inter-state trade are passing through a crisis on account of blockage of funds with the State Government as they have deposited over Rs120 crore towards excess amount on six lakh tonnes of anticipated rubber despatches this year.

Due to the recent notification of the Union Government reducing Central sales tax to 2 per cent, the dealers who pay 4 per cent VAT within the State on their purchases, can realise only 2 per cent on account of inter-state sale. As per the arrangement, the Central Government reimburses the amount to the State Government and the latter refunds the same to the dealer.

The State Government should realise that the amount being refunded is not in the form of subsidy or grant but only a refund of the amount excess deposited by the dealers, Mr Radhakrishnan said. Rubber is sent outside Kerala with accompanying documents such as invoice, delivery note, lorry receipt etc. Once the goods move through the check posts with these documents duly verified by the officials, then only inter-state sale takes place. On the strength of these documents, the Government should authorise the sales tax authorities to refund the excess amount paid by dealers, he added.

He said that more than Rs 50 crore is now blocked with the State Government on this account and the dealers have to borrow money from bank and other sources in order to make good the gap towards working funds. They are not in a position now to raise more working funds and, therefore, are unable to effect further inter-state despatches, he said.

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