The Hindu : Andhra Pradesh News : Sales tax advisory panel to be revived

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Sunday, Jan 09, 2005

Andhra Pradesh

Andhra Pradesh

Sales tax advisory panel to be revived

By Our Staff Reporter

HYDERABAD, JAN. 8. The Finance Minister, K. Rosaiah, has announced the Government's intention to revive the State-level sales tax advisory committee to tackle trade-related problems.

A decision to this effect would be taken soon. The panel with members from both trade and the Government was very effective in the past. It used to meet periodically and discuss practical problems faced by the trade, Mr. Rosaiah told a seminar on "draft Value Added Tax Act and Rules 2005,'' organised by the Federation of A.P. Chambers of Commerce and Industry (FAPCCI) here on Saturday.

The Finance Minister said this time round there was no escapefrom implementation of Value Added Tax (VAT). It was postponed for some reason or the other in the last few years but all States had now veered round to the view that the implementation was inevitable in the next fiscal. "The trade did not take the Government's plans seriously earlier but not any more," he added.

UP falls in line

He said that Uttar Pradesh, which had stoutly opposed the VAT till a couple of months ago, had also fallen in line.

Mr. Rosaiah maintained that the State Government was also opposed to the proposals of VAT as prepared in 2003.

They were considered tough for small traders. The Government took a stand that the A.P. General Sales Tax (APGST) with certain amendments would be good enough. But then, it did not want confrontation with the Centre and agreed to implement it.

Centre's assurance

He said the Union Finance Minister, P. Chidambaram, had assured him at the last empowered meeting of VAT that the Centre would make good the loss suffered by State Governments on account of implementation of the Act.

The draft VAT 2005 was far more trader-friendly than the 2003 proposals.

The Commercial Taxes Commissioner, V. Bhaskar, agreed that the Central Sales Tax (CST) was inconsistent with VAT but the Central Government had indicated it would withdraw the former.

He, however, sounded caution that elimination of CST was not easy. Brazil implemented VAT in 1965 but could not withdraw CST till now.

He added that there were four lakh dealers assessed to APGST, of which one to 1.5 lakh would be in the VAT net and another one lakh dealers in turnover tax (TOT). The remaining would get the respite.

He also said that Government had 65 per cent of its revenue at stake by implementing VAT.

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