Preparations under way for introducing VAT

By Our Special Correspondent

HYDERABAD, JULY 28. Preparations are under way to introduce value-added tax (VAT) in the State from April 1, 2002, covering all commodities.

The VAT which is a higher form of uniform floor rates, will shrink the number of sales tax rates further to a three-tier system to which all commodities are to be tagged.

The Principal Secretary for Revenue incharge of Commercial Taxes, Mr. K. C. Misra, announced this at a function here on Saturday at which Mr S. R. Nayak, Judge of the High Court, formally inaugurated the department's newly conceived scheme ``Settle Now, Gain Now'' to waive part of dues from dealers/traders and thus settle all 7,019 long-pending tax cases worth below Rs. 1 crore, in which a record amount of Rs 676.26 crores is locked up.

An ordinance has been issued for implementing the scheme effective from August 1.

Mr. Misra said the VAT was being pursued in line with the policy decision taken by the Chief Ministers of States following a series of Delhi meetings and preparations had been on in the State for the past one and a half years for adopting the measure. The new system would avoid such obnoxious hiccups as ``tax on tax'' and would ensure separate rates for all essential commodities. All States would follow this except those in the North-East and the newly-formed smaller States like Jharkand.

Mr. Justice Nayak hoped that the new scheme would bring the burden of dues to reasonable and manageable levels. He termed the scheme ``timely and well-planned,'' saying the solution otherwise would have been far away as, the High Court was now dealing with only those cases pertaining to 1991 and 1992. There was piling up of cases in the country as there were fewer lawyers per one million population here as compared to the West.

Mr N. Ramesh Kumar, Commissioner of the department, spoke of the large number of benefits of the VAT such as abolition of internal checkposts. He disclosed tax exemptions being given with regard to some items, and said booklets of Citizens' Charter which would a long way in serving the trade and industry were under preparation.

Mr D. V. Manohar, chairman of the AP chapter of CII, called the scheme ``very good'' and said most of the disputes regarding tax dues arose because of lack of clarify in law/Acts. He felt that the department was ``proactive'' and rational now and appealed to the trade to take advantage of the new scheme.

Mr S. Thirumalai, president, Federation of Andhra Pradesh Chambers of Commerce and Industry, spoke. Mr A. Rajendra Prasad, department's Joint Commissioner, proposed a vote of thanks.

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