The Hindu : Andhra Pradesh News : VAT: State to lose over 600-cr. revenue

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Tuesday, Feb 08, 2005

Andhra Pradesh

Andhra Pradesh

VAT: State to lose over 600-cr. revenue

By Our Staff Reporter

HYDERABAD, FEB. 7. The State Government has estimated a deficit of Rs. 600 crores to 800 crores over last year's revenue from sales tax on account of implementation of the Value Added Tax (VAT) from April 1.

The deficit was originally expected to be Rs. 1,600 crores to 1,700 crores but since the Central Sales Tax (CST) would be in vogue even after implementation of VAT, the deficit will be only Rs. 600 crores to 800 crores as the State will continue to get its share from CST collections, the Commercial Taxes Minister, Konathala Ramakrishna, told reporters here on Monday.

Mr. Ramakrishna said the Centre had given an undertaking to make good the entire quantum of shortfall suffered by States due to the implementation of VAT. A provision to the effect would be made in the upcoming Central budget. He also said there was a possibility of withdrawal of CST in a phased manner now that VAT would be coming into force.

The Minister said about one lakh ST assessees with a turnover below Rs. 5 lakhs and 1.5 lakh assessees with a turnover up to Rs. 40 lakhs would be out of the tax net when the VAT comes into effect. That would leave only one lakh traders with a turnover of over Rs. 40 lakhs for assessment under VAT.

Mr. Ramakrishna took pride that the ST collections touched the Rs. 1,000- crore mark for the first time in the current fiscal. There was a growth rate of 19.14 per cent and it was likely that it would go up to 30 per cent by the end of March, the month when the collections are generally the highest.

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