Govt to introduce VAT from January One, 2007

Chennai, July 22 (UNI) The Tamil Nadu government today announced its decision to introduce the much-awaited Value Added Tax (VAT) in the state with effect from January 1, 2007.

Presenting the budget for the year 2006-07, Finance Minister K Anbazhagan said the government had decided to introduce the VAT system after examining the matter thoroughly and after ascertaining the views of the trading community in the state.

The VAT regime was being introduced as the manufacturing and trading community of the state had been making repeated representations to the government for an early decision on introduction of VAT in the state, he said.

''Representations received from a large number of trade organisations, especially the pharmaceutical industry, manufacturers of various products and exporters within the state regarding reduction of rate of tax will to a great extent be accommodated on introduction of VAT,'' he said.

Mr Anbazhagan said all efforts would be taken to ensure that the small traders were not put to any hardships as a consequence of introduction of VAT.

Towards this end, traders buying and selling within the state would have a threshold limit of Rs 10 lakh for exemption from registration and payment of tax under the state Act. ''This is expected to benefit 45,000 traders in the state,'' he said.

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