Kerala Chamber disputes Govt. claim on reduced tax collection

Kochi, June 21 (UNI) Disputing the claim by the Kerala Government and the Commercial Taxes Department about a substantial decrease in income after the implementation of VAT, the Kerala Chamber of Commerce and Industry today said that this was ''misleading''.

In a statement here, Chamber president John K Paul said that this can be construed as an allegation against the business community.

He claimed while the tax collection during 2004-2005 was Rs 6797.4 crore, it increased to Rs 6980.3 crore in 2005-06. The tax collection figures of 2005-06 had in fact been shown without considering the amount of tax credit allowed by the government, he said.

''it is pertinent to note that the collection during April, 2006, is Rs 393.97 crores, which is three times the collection of April 2005,'' Mr Paul addedd.

He said the proposal to enhance the tax rate on certain commodities will affect the existing tax buoyancy and adversly affect the business community. A higher rate tax compared to the neighbouring states will only serve to increase corruption among the officials, he added.

Stating that the recent decrease in tax collection from petrol and diesel was due to the lower rate of tax in the neighbouring states for these commodities, Mr Paul said that increasing the tax rate without considering the rates in the other states was against the fundamental principle of VAT, which envisages uniform law and uniform tax throughout the country.

The government should try to achieve financial discipline through more scientific tax collection methods and by avoiding unnecessary government expenditure, he added.

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