The Hindu : Front Page : Campaign to reactivate VAT system

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Sunday, Dec 02, 2007
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Campaign to reactivate VAT system

Staff Reporter

Government to take steps to cross-check declarations of tax payers

Campaign to begin in Ernakulam next week

Volunteers from Kudumbasree to be involved

KOTTAYAM: The State government will launch a campaign for more effective implementation of the Value-Added Tax (VAT) regime, Finance Minister T.M. Thomas Isaac has said.

Dr. Isaac told presspersons here on Saturday that tax mobilisation through VAT had not been as effective as expected. Though the projected growth in VAT mobilisation was 50 per cent, the increase was only 10 per cent. During the sales tax regime, the officials could assess the turnover of businessmen, but under the VAT regime, tax collection was based on the declarations made by the taxpayer. There had not been any effective method to cross-check the declarations. The effort was to defuse the logjam by scrutinising and auditing the declarations at check-posts and compare these with the declarations.

The campaign would begin in Ernakulam next week, by auditing the check-post declarations for the past three years. In addition to Tax Department officials, volunteers from Kudumbasree units would be employed. The exercise was expected to be complete within two months, the Minister said.

The takeover of Cochin Refineries Ltd. by Bharat Petroleum Corporation Ltd. (BPCL) had resulted in a fall in the tax revenue to the tune of Rs.300 crore, he said. Dr. Isaac said a smear campaign alleging that the big fishes were being let out from the tax net was being carried out by a section of the media which was citing a non-existent court reference.

The government had reasons to feel satisfied with the recent victories in the legal battles, especially against Pepsico which was asked to pay up its Rs.70-crore tax arrears and the steps taken to recover the evaded tax from steel companies in Palakkad.

The government registered a major victory when oil PSUs agreed to settle Rs. 650 crore out of court.

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