TN to seek full compensation for switching over to VAT
Chennai, July 23 (UNI) The Tamil Nadu government will request the Centre to fully compensate the Rs 2,400 crore revenue loss per annum arising out of the state switching over to the VAT regime from January one next year.
Finance Secretary K Gnanadesikan has said that though the state was eligible only for 75 per cent of the compensation as it was joining the VAT regime in the second year, the government would urge the Centre to compensate it fully.
Under the Centre's three-year compensation scheme for states introducing the VAT, states that joined the VAT regime in the first year of its implementation (last year) were eligible for 100 per cent compensation in the first year and 75 per cent in the second year. It would come down further to 50 per cent in the third year, he said.
Presenting the budget for the year 2006-07, Finance Minister K Anbazhagan announced that the state would introduce VAT from January one next year.
Regardless of the losses, ''VAT was a must'' since industry and trade had been demanding it for some time now, the Finance Secretary said.
MORE UNI GV RA PM1424