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NT Bureau
Chennai, Dec 23:
 

VAT IS IN A NAME: State Chief Secretary L K Tripathy talking to newsmen on Value Added Tax Regime in Chennai today. Commercial Tax Secretary Devaraj is also seen. Photo: R Krishnamurthy

        In a bid to create awareness and clear the clouds of confusion among the people and traders over the 'impact' of the impending implementation of the Value Added Tax (VAT) regime in the State, the Tamilnadu government today said it would organise awareness camps throughout the State on 27 December.

        The awareness programme to be held in all the district headquarters, would dispel the doubts of traders and the public on the nature and salient features of VAT, Chief Secretary LK Tripathi said today at the Secretariat.

        Briefing newsmen on the VAT regime to be implemented in the State from 1 January 2007, Tripathi, alongwith Finance Secretary Gnanadesikan, Home Secretary Malathi and Commercial Taxes Secretary Devraj said with the coming of VAT, a system of uniform taxation throughout the country would be in place.

        The system was first introduced in Haryana and is now being followed in as many as 24 States of the country. Only 4 States are outside the VAT regime. The new system would spare the traders the trouble of remitting surcharge, resale and additional taxes. Currently in Tamilnadu, taxes vary from 2 to 20 per cent. With VAT, the taxation would only be of three types. 1, 4, and 12.5 per cent would be the rates of taxation, Tripathi explained.

        It was further clarified that a trader whose annual turnover was not more than Rs.50 Lakhs could pay compounding tax of half per cent if he so desires. The same in other states was one per cent. Traders whose annual sale was less than Rs.10 Lakh need not register under the VAT. For traders who were engaged in inter State trade, the upper limit would be Rs.5 Lakh. As a result of this, about 30 thousand traders would be benefitted. The tax-exempted commodities like rice, cooking oil and others would continue to be under the exempted list.

        The senior government officials also said the State would incur a loss of about Rs.3000 crore as a result of the introduction of VAT. This would be compensated by the Central government in a staggered phase.

        Small traders have been reassured that they would not be affected by the new tax regime. Prices of essential commodities are also likely to come down as a result of the new system, it was said.

        The traders who register themselves under the new regime could use the identity number throughout the country. An exclusive call center has been also set up to clear the suspicion of traders and public on the new taxation system and the number is 044-28291082.