Special Correspondent

VAT on tea and cofee powder brought down to 4 p.c. from 12.5 p.c.

HYDERABAD: Tea, coffee and salt powder will cost less in Andhra Pradesh henceforth.

The Value Added Tax (VAT) on tea and coffee powder has been brought down from 12.5 per cent to 4 per cent while the tax on salt, which was 4 per cent, has been totally waived. The VAT has also been reduced from 12.5 per cent to 4 per cent on cashew nut.

Andhra Pradesh Chief Minister Y.S. Rajasekhara Reddy announced these decisions in the Assembly on Wednesday while intervening in the discussion after the Bills to amend the APVAT and Rural Development Acts were introduced.

Dr. Reddy made the announcement on tea and coffee in deference to the wishes of traders who had made several representations to the Government and even petitioned the court. The court had left the matter to the discretion of the Government.

Tea and coffee dealers had for long been protesting against the levy of 12.5 per cent tax citing the example of other States where the produce was charged under VAT at only 4 per cent. The high rate of tax had also promoted the dealers to make the purchases in other States.

Tax evasion

Tax evasion in coffee transactions had also come to light which apparently prompted Government to check the activities of the dealers.

While selling the end produce, they were reported to be making book entries about dealing in coffee seed which was taxed only at 4 per cent.

Commercial Taxes Minister Konathala Ramakrishna, who piloted the Bill, left the decision on reduction of VAT on the four products to the Chief Minister after referring to the representations of dealers. He refused to concede the demand for tax reduction on tiles.

Mr. Ramakrishna, who also holds the portfolio of Law and Courts, said 144 vacancies of Public Prosecutor posts would be filled soon. Ten special courts on agency areas and 35 courts of junior and senior civil judges would also be established elsewhere.

The House passed a Bill to amend the AP Housing Board, envisaging a role for it with public-private participation, by division vote which was won by 80 - 37.