Online edition of India's National Newspaper
Monday, Apr 18, 2005

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

Kerala - Kollam Printer Friendly Page   Send this Article to a Friend

Cashew sector to benefit from VAT

Staff Reporter

Purchase tax will be reimbursed


  • Purchase tax to be reimbursed
  • Saving potential for cashew processors

    KOLLAM: At a time when the trading sector adopts a strong stand against the Value Added Tax (VAT) regime, the cashew sector in Kollam is looking forward to the new tax regime with great expectations. VAT has brought cheer to the cashew sector mainly because the purchase tax paid while buying native raw nuts will be reimbursed.

    At present, raw nuts produced in Kerala invites a purchase tax of four per cent which the buyer (processor) will have to pay while purchasing such raw nuts. With the native raw nut selling at Rs. 40 per kg, the tax works out to an additional Rs. 1.60 on a kg. More than one lakh tonnes of native nuts are produced annually. At the present rates, it will mean a saving of more than Rs. 16 crores for the cashew processors. In spite of the purchase tax, native raw nuts are in high demand because of the out turn on processing. Native raw nuts also have the reputation of giving an appreciable out turn of the export-oriented W-320 grade kernels.

    Under the VAT regime, the purchase tax of 4 per cent will have to be paid and receipt obtained from the seller. But the VAT regime enables the processor to get that tax amount reimbursed. The reimbursement can be availed of when the buyer makes a sale after processing the raw nuts. In case the kernels are sold in the local market by the processor, such sales invited a sales tax of 12.5 per cent. But in the monthly sales tax returns, the processor needs to account only for 8.5 per cent. The remaining 4 p.c. from the 12.5 per cent collected can be retained by the processor as reimbursement for the purchase tax paid at the time of buying the raw nuts.

    When the kernels are exported, the processor can make a claim for reimbursement of the purchase tax by producing raw nut purchase and the corresponding export records before the concerned sales tax office.

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

    Kerala

    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 |


  • News Update


    The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
    Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |

    Copyright 2005, The Hindu. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu