The Hindu : Andhra Pradesh News : VAT draft ordinance on the way

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Saturday, Jan 01, 2005

Andhra Pradesh

Andhra Pradesh

VAT draft ordinance on the way

By Our Staff Reporter

VIJAYAWADA, DEC.31. The draft ordinance for the implementation of the value added tax (VAT) would be introduced in the State by January 15, 2005. About 1.5 lakh traders were expected to come under the new Act, the Commissioner for Commercial Taxes, V. Bhaskar, told reporters in an informal chat here on Friday.

While VAT would be mandatorily applicable for traders whose annual turnover is over Rs. 40 lakhs, it had been made optional for those with a turnover between Rs. 5 lakhs and Rs. 40 lakhs.

However, traders whose income is less than Rs. 5 lakhs had been totally exempted from the purview of the new tax, he said.

Traders who had a turnover of Rs. 5 lakhs and Rs. 40 lakhs would have to pay a turnover tax of one per cent if they do not opt for VAT.

Registration process

Later in an interactive session with industrialists, traders and representatives of various trade organisations, Mr. Bhaskar announced that the registration process for the traders to apply for VAT would commence after January 15, 2005 and would be completed by March 31.

This would enable the traders to file their VAT invoices from April 1, he said.

Seeking to allay various misconceptions and fears over the implementation of the new legislation, the commissioner said VAT would considerably reduce the interface between tax officials and traders; prevent abuse of discretionary powers by the commercial taxes officers and more importantly simplify the present archaic tax structure.

The traders who came under the VAT regime would be entitled to input tax concessions, whereas those traders in the Rs 5 lakhs to Rs 40 lakhs turnover category whose switchover to VAT was voluntary, would not be eligible for such concessions if they chose to remain beyond the purview of the new legislation, he said.

Mr. Bhaskar said that under the new VAT structure, the traders would be entitled to immediate tax credit adjustment, but cash refund would be extended only after the end of the successive financial year.

The president of the Vijayawada Chamber of Commerce and Industry, G. Subba Rao, and the president of the Andhra Chamber of Commerce, Murali Krishna were present.

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