Financial Daily from THE HINDU group of publications
Saturday, Apr 30, 2005
Industry & Economy
AP: Plastic industry to get monthly VAT refunds
Hyderabad , April 29
THOUGH the overall review of VAT (value-added tax) is to take place after July 1, the Andhra Pradesh Government has started fine-tuning the new tax regime.
The first benefit goes to the plastic industry, thanks to what the industry calls an anomaly in input and output tax rates.
The Government has decided to make monthly refund of input credits for the plastic industry.
"We have taken this decision after considering the genuine cause," Mr V. Bhaskar, Commissioner for Commercial Taxes, said, addressing an interactive meeting with traders on VAT.
The session was organised by the Federation of Andhra Pradesh Chambers of Commerce and Industry (FAPCCI). He said this was to ensure that working capital was not blocked.
The first ever cash refunds under the VAT were originally to be made only in 2007.
Mr Bhaskar said the department had evolved a bank credit mechanism that ensured automatic transfer of refunds to the bank accounts of the traders concerned.
"We will make traders insulated from our offices as far as refunds are concerned," he said.
The output tax was only four per cent and the input tax 12.5 per cent in the plastic industry, leaving significant chunks of funds with the Government. This affected capital flows.
He said the Department was willing to consider genuine requests from other segments as well.
Mr Nitin K. Parekh, Chairman of Trade and Commerce Committee of FAPCCI, felt that the advance ruling mechanism should be taken care of by an independent body like the one in Maharashtra to ensure impartiality.
With regard to collecting a hefty fee of Rs 1,000 for getting written answers for traders' doubts, Mr Nitin said it was not fair and asked the Government not to collect at least for the first six months.
"Don't see it as a revenue option," he said. It was unfair to keep industrial inputs in the 12.5 per cent slab. There has to be uniformity across the country in this regard," he observed.
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