The Hindu Business Line : TN to switch to VAT from January 1

Bowing to demands
The Tamil Nadu Government has finally agreed to implement VAT with the Tamil Nadu Finance Minister and Finance Secretary acknowledging that there was demand from a cross-section of industry segments to switch over

Chennai , July 22

Tamil Nadu will shift to a Value Added Tax (VAT) system from January 1, 2007. Tamil Nadu and Uttar Pradesh were the only States not to have switched over to VAT.

Shifting to VAT has been a demand from all sections of industry and trade, except for a section of small traders who expressed apprehensions over the new system.

Decision welcomed

Industry associations and trade bodies have welcomed the Government's decision to move to a VAT system. Mr B. Santhanam, former Chairman, Confederation of Indian Industry, Tamil Nadu and Managing Director, Saint-Gobain Glass India, said the announcement "lifted a huge cloud of doubt" about investments. The next six months should be spent on ensuring a smooth transition and a proper implementation of the new system. The Government should ensure that there were minimal anomalies, he said.

Both the Finance Minister in his budget speech and the Finance Secretary, Mr K. Gnanadesikan, while briefing reporters later, acknowledged that there was demand from a cross-section of industry segments for the switch over.

Small traders

For small traders, a threshold limit of Rs 10 lakh for buying and selling within the State has been set for exemption from registration and VAT.

With the introduction of VAT, resale tax will be abolished, the Finance Minister, Mr K. Anbazhagan, said while presenting a tax-free budget for 2006-07.

A trader friendly `Samadhan' scheme will be announced for dealers with arrears of sales tax. This would help the Government and the business community to settle outstanding dues in the background of the shift in commercial tax system, he said.

More Stories on : Tamil Nadu | Taxation | Financial Policy

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
TN to switch to VAT from January 1

IFFCO plans second 1,000 MW power plant

ICICI Bank net rises 17 pc

June quarter jingle: A positive bell

An Intel computer for less than Rs 7,000

India Inc boards get younger, sans gender balance