Special Correspondent

CUDDALORE: The Cuddalore District Chamber of Commerce has appealed to Chief Minister M. Karunanidhi to simplify sales tax audit procedures and also take traders into confidence before finalising the percentage of the goods and service tax (GST).

Chamber president D. Shanmugham and general secretary V. Veerappan have submitted a representation to the Chief Minister.

Mr. Shanmugham told The Hindu that ever since the value added tax (VAT) regime had come into force on January 1, 2007, enforcement officials were not conducting annual audit.

However, whenever they come for audit they call for accounts of all previous years, right from January 1, 2007, and it could be four to five years' accounts. It meant that the traders would have to keep the account books and sundry receipts safe for the entire period.

As the officials would be doing audit on the business premises for days together, trading activity would be affected. Hence, the chamber was of the opinion that the officials could scrutinise accounts of the financial year immediately preceding the current fiscal to save time and facilitate unhindered trade transactions.

They further said there was a clause that made it clear that those who pay compound tax of 0.5 per cent through Form-K were exempted from VAT audit. But, contrary to the guidelines, the accounts of these traders too were subjected to audit.

There was also an inordinate delay in issuing assessment order (after completion of the scrutiny of accounts) by the officials.

Therefore, the chamber suggested issuance of assessment order every year in conformity with the Form I-1 procedure.

The chamber alleged anomaly in the levy of input tax. As per the rules, the traders were entitled to get a deduction of a 4 per cent as input tax.

However, there were certain raw materials that suffered a tax of 12.5 per cent and, therefore, it would be only appropriate if the input tax deduction was also raised to 12.5 per cent in such cases.

As far as pharmaceuticals were concerned, a compound tax of 0.5 per cent was being levied for a turnover of up to Rs. 50 lakh. The chamber was of the opinion that with prices of drugs soaring owing to various factors, the turnover limit ought to be raised to Rs. 1 crore.

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