The Hindu : No going back on VAT

Online edition of India's National Newspaper
Thursday, Apr 03, 2003

Southern States

Southern States - Tamil Nadu

No going back on VAT

By Our Tamil Nadu Bureau

Chennai April 2. While a few States doggedly refuse to implement the Value-Added Tax regime, the Tamil Nadu Government has obtained the presidential go-ahead for introducing the draft law on VAT in the on-going Assembly session, paving the way for enforcing the new regime by June.

Amid arrests of several traders including a key association leader, T. Vellaiyan, who is spearheading the anti-VAT stir, senior officials asserted that there was "no change whatsoever in the government commitment" to introduce VAT in Tamil Nadu. "Regardless of what happens in other States, there is no going back on VAT here" a government source said.

The loud protest by a few States including Delhi notwithstanding, Tamil Nadu is of the view that the national-level empowered committee would not "unduly" delay introduction of VAT. The committee, scheduled to meet on April 8, was expected only to revise the deadline for kick-starting the VAT regime from March to May or June. "It is unlikely to put it off by one year," the official asserted. For, only three months was required for all States to enact the VAT law and notify the rules.

In Tamil Nadu, all 320 commercial tax offices have been computerised and are ready to usher in the VAT regime, say officials. Besides, "awareness" sessions have been held for traders and dealers.

Last week, the Tamil Nadu Government obtained the formal nod from the President for its draft Bill, clearing the way for tabling it in the Assembly. The VAT regime, which widens the sales tax net and makes it mandatory for traders, dealers and manufacturers — at all levels — to maintain billing for sales, would simplify the tax payment procedures. "There will be fewer forms and simpler ones to fill up. All traders who do not evade paying sales tax will welcome it. And, only the traders who are opposed to coming into the tax net will protest it," insists a key official of the Commercial Tax department.

However, even as a two-day bandh called by a section of traders was coming to and end, the city police last night arrested Mr. Vellaiyan, president of the Tamil Nadu Vanigar Sangankalin Peravai, triggering closure of shops in a few parts of the State for the third day.

Mr. Vellaiyan and other office-bearers were arrested on charges of threatening and intimidating some traders at Purusawalkam here, asking them to down the shutters. The police said cases under various sections of the IPC were registered against them.

Meanwhile, the association, in a press statement here, claimed that several traders, who protested the arrests, were also taken into custody. As many as 200 traders were rounded up so far.

Condemning the arrests, the association charged the Government with trying to stifle the voice of the traders. Demanding the immediate release of the arrested persons, members of the association would stage a relay hunger-strike from April 4.

The Tamil Nadu Chamber of Commerce and Industry president, S. Rathinavelu, who had opposed the bandh call, however, appealed to the Chief Minister to intervene and release Mr. Vellaiyan immediately. Among the other bodies which called for his release was the Tamil Nadu Small and Tiny Industries Association.

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