CHENNAI: Even as speculation is rife about the date on which Tamil Nadu will graduate into a Value-Added Tax (VAT) regime, a section of the industry feels that that the earlier it is done, the better it would be for the State.

Apart from possibly lowering the cost to be paid by the end-user on the products, joining the States that have adopted VAT would help Tamil Nadu in maintaining the momentum of its manufacturing sector.

Geographically bound by States that have switched over to the new structure of calculating tax from April 1, the delay in implementing VAT could blunt the competitive edge of its manufacturing units, say industry representatives.

Concurring with them, taxation experts feel that if left as it is, the situation could emerge into one in which the manufacturing units in Tamil Nadu might be forced to consider setting up their expansion projects in the neighbouring States. The tax benefits and simple procedures that the new regime promises could also tilt the balance in favour of those States that have moved over to VAT when attracting greenfield industrial projects.

The one-point message that many in favour of the new structure seek to drive home among the trade and industry is simple — VAT is user-friendly, simplifies the procedures and rationalises the tax structures. They want the trade and industry to collectively impress on the State Government the need to adopt it at the earliest.

From the revenue perspective of the State Government too, switching over to VAT would be beneficial. Stating this, industry representatives and experts in the field of taxation point to the Centre's stand that it would compensate the losses, if any, for States as a result of implementing VAT. In the event of Tamil Nadu incurring a dip in its tax collections, it could look up to the Centre to bridge the shortfall if any.

Official sources explain that it will take some time to "reactivate the process" of adopting VAT. Only the next session of the Assembly can pass the required legislation. So, VAT is not on the horizon for some time.

Printer friendly page  
Send this article to Friends by E-Mail

Tamil Nadu

News: Front Page | National | Tamil Nadu | Andhra Pradesh | Karnataka | Kerala | New Delhi | Other States | International | Opinion | Business | Sport | Miscellaneous |
Advts: Classifieds | Employment | Updates: Breaking News |