The Hindu : New Delhi News : Tax advocates against VAT

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Friday, Apr 08, 2005

New Delhi

New Delhi

Tax advocates against VAT

By Our Staff Reporter

NEW DELHI, APRIL 7. Expressing concern over the Delhi Government's refusal to respond to genuine apprehensions of city traders over implementation of the controversial new Value Added Tax (VAT), the All India Tax Advocates Forum today warned that the move was set to destroy the distributive character of the metropolitan city.

The Forum president, M.K. Gandhi, said the anti-trader stance of the city Government would not only lead to chaos in businesses but also to the flight of capital and trading activities into the neighbouring States such as Uttar Pradesh and Rajasthan.

"That apart, the penal provisions in the new VAT law have been enhanced to draconian levels even as the Union Finance Minister had assured that such clauses as available in the earlier Sales Tax regime will be retained in the new VAT regime,'' the tax advocate charged.

He said that as against the provisions in Delhi Sales Tax Act, penalties and prosecutions were to commence simultaneously with hardly any kind of provision for natural justice and fair play. Also, traders with a turnover of Rs. 5 crores and above are now expected to file their returns on a monthly basis and correlate the same with their annual returns and audit reports. He explained that as against annual tax assessment returns prevalent in other States, Delhi traders have been slapped with monthly returns leading to unnecessary paper work and laborious procedures. This, he feared, could lead to increase in corruption.

Mr. Gandhi maintained that the traders with a turnover of less than Rs. 5 crores were expected to file at least four assessment returns even as the VAT law had dispensed with the trader-savvy safety nets against the arbitrary directions of the ST authorities.

The Forum president said a very short time-frame had been given to traders to claim concessions and exemptions in several cases of inter-State trade and he criticised the reduction in the time period from 12 months to nine months flat.

While reiterating the demand of the Forum for a rethink on the implementation of the new VAT law, the Forum expressed shock at the lukewarm response of the city Government to traders' grievances, especially against the backdrop of the fact that the local administration was totally dependent on sales tax revenues.

"It is high time that the local Government takes a holistic overview of the new system for long term goals of providing a fillip to Delhi's trading activities and also a sound economic atmosphere to garner added revenue for its developmental activities,'' he suggested.

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