The Hindu : Andhra Pradesh News : VAT on rubber products cut

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Tuesday, Jan 22, 2008
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Andhra Pradesh

Andhra Pradesh

VAT on rubber products cut

Special Correspondent

HYERABAD: The government has decided to reduce Value Added Tax (VAT) on rubber products to 4 per cent from current 12.5 per cent to avoid adverse impact on trade.

The Cabinet Sub-Committee on VAT, headed by Finance Minister K. Rosaiah, which took this decision here on Monday, noted that the State was losing trade in rubber products and, consequently, tax also, with people opting to buy them in Tamil Nadu and Karnataka which collected only 3 per cent VAT.

Problems discussed

The meeting, which was attended by Commercial Taxes Minister K. Ramakrishna and Industries Minister J. Geetha Reddy, considered various practical problems faced by officials in implementing VAT. Mr Rosaiah told reporters later that the VAT rate on rubber products in the State was seen to be so high that even a public sector undertaking like APSRTC wanted to get its tyre re-treading works done in other States.

The Committee deferred a decision on representations by service organisations to allow exemption from VAT on their purchases, as was done in the case of the TTD and Sri Satya Sai Trust, Puttaparthi, as also on the plea from the trade to collect VAT on duplicate automobile spare parts at the same rate of genuine ones.

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Andhra Pradesh