Special Correspondent

To Tamil Nadu VAT Act 2006

MADURAI: The Tamil Nadu Chamber of Commerce and Industry has appealed to the State Government to bring down the rate of tax under Tamil Nadu Value Added Tax Act 2006 on unspecified commodities from 12.5 per cent to four per cent.

In a pre-budget memorandum submitted to the Finance Minister, K. Anbalagan, the chamber felt that scaling down the rate would promote better tax compliance and stimulate increased revenue to the government. The memorandum, submitted by a delegation led by the senior president, S. Rethinavelu, and president, N. Jegatheesan, pointed out that the amendment made to the Central Sales Tax Act had nullified the purpose for which conditional exemptions in turnover limit were given for certain commodities under the TN VAT Act.

Hence, such exemptions should be converted as general exemptions. Dealers, it said, were hesitant to buy agro products from farmers, on account of conditional exemptions, as they had to pay purchase tax under Section 12 of the TN VAT Act.

Calling for the scrapping of tax levy on edible oil seeds, on the lines of edible oils and edible oil cakes, the chamber said that the levy prevented edible oil manufacturers from getting input tax credit. It called for suitable amendments to the TN VAT Act to permit dealers with Rs.5 lakh and Rs.10 lakh exemption limits to come under VAT levy, if they so desired; allow dealers under compounding tax system to pay tax as per scheduled rates only for the sale in excess of Rs 50 lakh and to allow input tax credit for inter-State sales without submission of Form C.

According to a chamber press release, its other demands included an increase in subsidy for drip irrigation from 40 per cent to 75 per cent; reduction of tax on ceramic tiles from 12.5 per cent to four per cent, as in Puducherry; a similar reduction for gas stoves and iron grills; exemption or levy of four per cent tax on electric scooters, motorbikes and mopeds; exemption for ice bars and mostly used by the fishing industry.