The Hindu : Kerala / Thiruvananthapuram News : Launch of `Lucky VAT' today

Online edition of India's National Newspaper
Tuesday, Aug 29, 2006

Kerala

Kerala - Thiruvananthapuram

Launch of `Lucky VAT' today

Special Correspondent

A mechanism tried with success in Venezuela

THIRUVANANTHAPURAM: The proposed `Lucky VAT' mechanism to encourage tax compliance among shoppers will come into force in the State from Tuesday.

This is a mechanism that has been tried with success in the South American country Venezuela. Kerala is the first Indian State to experiment with it.

At a press conference here on Monday, Finance Minister T.M. Thomas Isaac said a shopper would get a `Lucky VAT' coupon for every purchase of Rs.1,000 made from a merchant registered under the Value Added Tax (VAT) system. Scratch the coupon at the spot meant for scratching and the shopper will know whether the purchase has brought him/her luck. The prize amount will be indicated on the coupon. Prizes up to Rs.5,000 will be paid by the shopkeeper, who can later get it reimbursed at any branch of the State public sector Kerala State Financial Enterprises (KSFE).

The shopper will have to approach the nearest branch of the KSFE for any prize exceeding Rs.5,000. To claim it, he or she will also have to submit to the KSFE branch a form issued by the shopkeeper concerned, besides any document to prove identity. The KSFE will deduct an amount by way of tax from the prize money. Winners of the highest prize of Rs.1 lakh will have to wait for three to four days to get the cash from the KSFE branches since the coupons in such cases have to be crosschecked with the Taxes Department.

At present, just over 1,30,000 merchants in the State are registered under the VAT system.

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