Kanara Chamber of Commerce and Industry (KCCI) has opposed the State government’s decision to increase VAT by 0.5 per cent.

Mohammed Ameen, president of KCCI, said here that the proposed hike by 0.5 per cent with effect from August 1 is uncalled for.

‘Unjustified hike’

“When the budget proposals were made in March 2012, there was no proposal for tax hike of this nature. The present hike at very short notice is highly unjustified,” he said.

Instead of implementing the hike from August 1 in a hurry, the government may take up the issue at a future date, after consultation with the trade and industry, without harming the interests of stakeholders, he said.

Stating that huge sums of tax arrears due to the government are now held up in various stages of litigation, he said the government could come up with special schemes such as tax adalat, Kara Samadhan Scheme, one-time settlement etc. for speedy recovery of the outstanding dues.

Relook at exemptions

Ameen said the KCCI is of the opinion that it is the right time to relook at the exempted goods and tax levied on them as they have been enjoying total exemption from VAT for over the past eight years.

He said the government could speed up the process of regularising irregular constructions involved in violating building norms, so that huge sums can be realised immediately.

Ameen urged the government to withhold the enhancement of VAT. vinayak.aj@thehindu.co.in

(This article was published in the Business Line print edition dated July 30, 2012)
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