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`Pay first, claim VAT refund later'

May lead to harassment, feel experts

Ludhiana: Claiming a VAT (Value Added Tax) refund may now prove to be difficult for Punjab-based VAT exempted units, as the Punjab Excise and Taxation Department has notified that no refund would be issued to exempted units unless the tax, on which the refund is claimed, has been deposited with the State Government.

Although the new direction issued by the department is aimed at curbing claims of VAT refunds through wrongful means, the industry as well as tax experts feel that it would be the hundreds of VAT exempted units in the State which would face trouble in getting refunds for no fault of theirs. It means the department would have the right to stop the disbursement of VAT refund of an exempted unit if a trader, from which an exempted unit has bought goods, has not deposited the tax on that particular sale to the Government, said tax expert P.C. Garg adding it would result in harassment of genuine exempted units.

This new provision has been made applicable from April 1, 2005. PTI

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