The Hindu : Tamil Nadu / Chennai News : Chemical industries' plea to Government

Online edition of India's National Newspaper
Thursday, Dec 21, 2006
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Tamil Nadu

Tamil Nadu - Chennai

Chemical industries' plea to Government

Special Correspondent

CHENNAI: Chemical Industries Association has urged the State Government to make a distinction between molasses used by chemical industries as raw material and that for other uses under the upcoming value-added tax regime.

Association president and member of High-Level Task Force for Industrial Development, P.K.N. Panicker said a representation in this regard had been made to Chief Minister M. Karunanidhi. He said molasses used as raw materials in industrial use would conform to the Item 67 of the First Schedule-Part B of the VAT notification, which says "industrial inputs for use in or in connection with the manufacture of goods in the State, packing materials and labels as notified by the government." Molasses, however, have been classified under the Second Schedule — item 10 with 30 per cent tax rate — without making any differentiation between the raw material used for industrial use and that goes for production of alcohol for beverages.

Even under the Tamil Nadu General Sales Tax regime, a clear distinction was made between the two types of molasses with the raw material for industrial use levied relatively less tax, according to Mr. Panicker.

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