The Hindu : Business : Gold merchants protest against VAT rate

Online edition of India's National Newspaper
Wednesday, Oct 11, 2006
ePaper

Business

Business

Gold merchants protest against VAT rate

Special Correspondent

Thiruvananthapuram: Gold merchants have protested against the prevailing rate of the Value Added Tax (VAT) on gold ornaments in the State.

In a statement here on Tuesday, they said that when South Indian States fixed the VAT at 1 per cent, Kerala increased it to 4 per cent from June 29.

They contended that industry in the State was facing a whole lot of problems because of this. The main problem was the flight of business to neighbouring States. Another was the dependence on dealers without registration by the buyers.

These dealers cheated the buyers by selling ornaments made with low-quality gold.

They stated that as the gold market had expanded considerably, a lot of people worked in it now. Developments such as this would throw many out of job.

The dealers warned that the situation would also lead to a spurt in gold smuggling. They also objected to the decision on compounding taken by the Government.

They said that the compounding rate fixed by the Government was 200 per cent of the tax paid during 2004-05.

The rate of tax during that year was 4 per cent. It would now be 8 per cent.

The dealers would in all probability back out of compounding because of it.

They stated that these factors would lead to loss of tax revenue to the Government.

They urged the Government to accept the spirit of the recommendations of the Empowered Committee and bring down the rate of the VAT on gold ornaments to the level of other States.

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

Business