Traders should cooperate to introduce VAT in TN: Krishnasamy

Chennai, Dec 13 (UNI) Describing the Value Added Tax (VAT) system as the best economic innovation in the 20th century, TNCC President M Krishnasamy today appealed to traders to extend their cooperation to introduce VAT regime in Tamil Nadu from January one, 2007.

In a statement here, decrying opposition to the introduction of VAT system, the Congress leader said Tamil Nadu could not isolate itself when the rest of the country had introduced the advanced tax system. It would affect the overall development of the state, if Tamil Nadu says no to the new tax regime, which was being implemented in about 130 countries, he added.

''When the world is moving in one direction, we can't move in another direction,'' he said.

On the apprehensions expressed by some trade bodies that introduction of VAT would lead to rise in prices and destroy retail trade, the Congress leader said this was an attempt to confuse the traders.

Once VAT came into being, there would be only two systems of taxation the Central Value Added Tax (CENVAT) and the VAT by the state government. If CENVAT was imposed at manufacturing point, VAT would be levied by the state during local trade transactions, Mr Krishnasamy clarified.

He said though VAT was levied at different stages, there would not be double taxation as trade bodies were alleging.

An additional tax would be levied only when the value of the products were added and not when an additional transaction would take place, he informed.

The traders should realise that when VAT would be introduced some taxes like additional sales tax, re-sale tax and sur-charge would be totally abolished. Besides, the tax system would get rationalised and simplified, VAT regime would ensure transparency in taxation, he said.

Mr Krishnasamy said the Tamil Nadu government had announced that retailers, who had an annual sales turnover of Rs 10 lakh would be exempted from the purview of VAT and it would be optional in case of those who make an annual sales turnover of Rs 50 lakh.

This was an attempt to protect the interest of retailers in the state, he added.

UNI WS GKT KR RN1817