Govt denies AIADMK charge on VAT regime fuelling price rise

Chennai, Apr 5 (UNI) The Tamil Nadu government today denied the Opposition AIADMK's charge that introduction of the Value Added Tax (VAT) regime led to price rise and increase in the prices of drugs in the State.

Intervening during the debate on the demand for grants for Commercial Taxes department, Electricity Minister Arcot N Veerasamy, refuting former minister S M Velusamy's (AIADMK) charge said the price rise was due to the escalating cost of the raw materials.

''The reason for the price rise was not due to the VAT, but increase in the prices of raw materials, which has three to four times over the last few years'', he added.

Responding to Mr Velusamy's contention that the prices of drugs had gone up because of the VAT, Mr Veerasamy said under the VAT regime, several items were exempted from tax and the tax on several other items were brought down significantly from 12 per cent to four per cent.

The House witnessed heated exchange between the Opposition and the Treasury Benches when Mr Velusamy compared the prices of the essential commodities during the previous AIADMK regime and the ruling DMK. He also gave a copy to the Speaker.

Intervening, Food Minister E V Velu, for his part, reeled out the prices of some of the commonly used articles which had come down, prompting AIADMK whip K A Sengottaiyan to dare the government to face the People's court for the rates quoted by the Minister.

Mr Veerasamy sought to put an end to the issue by recalling Chief Minister M Karunanidhi's announcement to provide cooking gas and pulses through fair price shops and said the government was prepared to share the dais for a discussion.

UNI