Goa Government had allowed dealers to retain 75 per cent of the tax collected
PANAJI: The Central Excise Department in Goa has agreed not to pursue the tax notices issued by it to the industries in Goa on the 75 per cent of the value added tax (VAT) retained by them under the Goa VAT Deferment-cum-Net Present Value Schemes till it sought a clarification from the Board.
Two such schemes were implemented by the State Government, ahead of introduction of VAT, in 2001 and 2003, with a view to promote industrial development by providing tax benefits to the industrial units to partly compensate them for the loss of prevailing tax exemptions on changes in the Central Sales Tax Act and the introduction of VAT regime.
According to Keshav Kamat, executive committee member and former president of Goa Small Industries Association (GSIA), representing small and medium industry in the State, under the schemes, instead of collecting the entire amount of tax from a dealer and then giving 75 per cent back as subsidy, the Government of Goa has allowed the eligible dealers to retain 75 per cent of the tax collected and pay only the balance 25 per cent to the State treasury. This was done to avoid the administrative hassles to the Commercial Tax Department.
The GSIA official pointed out that of late the Central Excise started issuing notices to the units to pay 16 per cent excise duty, plus 2 per cent education cess on this amount.
Following intervention by the GSIA and the Goa Chamber of Commerce and Industry, the Central Excise Department has agreed not to pursue the notices till it seeks a clarification from its Central Board, Mr. Kamat said on Monday.