Chennai, Jan 1 (UNI) The Value Added Tax (VAT) regime has come into force in Tamil Nadu, making it the most preferred destination for investors.
''Any investor who wants to invest in the state favours VAT regime, which is good for the state. By implementing the VAT system Tamil Nadu will become the most preferred destination for investors,'' Industries Secretary Shaktikanta Das told UNI.
''This is one system (VAT) the state lacked. The investors look for VAT as it will benefit the industries to a great extent,'' he added.VAT would create a competitive environment in the state for initiating business in the manufacturing sctor.
It would also facilitate growth of supply chain for any industrial and manufacturing activity, Mr Das said.
The VAT regime has come into force amid protests from the Traders' Associations. They had called for an agitation tonight to burn the copies of VAT Bill passed in the Assembly on December 5.
Though various industry bodies and chambers welcomed the government's move to switch over to VAT, traders' associations feel that they would be badly hit by it.
''With Tamil Nadu becoming a manufacturing hub, the common taxation system would help the state to compete in the world market,'' Chambers and Industry said.
The loss to be incurred by the state following introduction of VAT was expected to be compensated by the Centre in a phased manner.
Though fears were expressed among various quarters VAT would affect the interests of small traders, the government allayed their fears and said implementation of VAT would help the traders.
It would spare them from remitting surcharge, recharge and additional taxes.
Stating that concessions to small and retail traders would continue under the VAT regime, the government said it would not affect the small and retail traders.
''Switching over to VAT will provide a common marketing and tax systems. The traders will become more competitive,'' Chief Secretary L K Tripathy said during a news conference.