The Hindu : Business : VAT hits industry hard: chamber

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Friday, Dec 02, 2005

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VAT hits industry hard: chamber

Staff Reporter

KOZHIKODE: The Calicut Chamber of Commerce and Industry (CCCI) has alleged that the levy of the value-added tax (VAT) has hit trade and commercial operations.

A special meeting of the CCCI managing committee held here on Tuesday, wanted the Government to convene a meeting of all concerned at the earliest and take steps to remove the anomalies in connection with VAT implementation.

The meeting appealed to Chief Minister Oommen Chandy and Finance Minister Vakkom Purushothaman to take urgent steps in this regard.

The meeting opined that contrary to expectations that it would benefit trade, the imposition of VAT since April 1, 2005 by the Government in the State had an adverse impact on trading operations.

The meeting noted that the law relating to VAT was vague and not explicit.

The rate of tax too was being changed from time to time.

The department officials were not in a position to fully dispel the doubts of traders in this regard.

The trade and commerce sector had to bear the brunt of such anomalies, the CCCI office-bearers said.

The meeting noted that the expectation and publicity campaign that went with VAT implementation that it would be simple and transparent were proved wrong.

Besides, it has neither benefited trade and commerce nor increased the share of Government revenue.

On the reverse, there has been a sizable deficit in the revenue earned by the Government since the last eight months. From 1,40,000 taxpayers, the number has now come down to one lakh.

The hope that VAT imposition would benefit the consumer by bringing down prices too proved wrong too, the CCCI said.

The CCCI expressed apprehension that unless the Government acted in a swift manner to remove the uncertainties in VAT implementation, the downfall faced by industry and agriculture in the State would be experienced in the trade and commerce sectors too.

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