VAT will eliminate malpractice: Minister

By Our Staff Reporter

THIRUVANANTHAPURAM, AUG. 27. The Finance Minister, Mr. K. Sankaranarayanan, has said that sales tax evasion would be completely eliminated and transparency induced in the taxation structure once the Value Added Tax (VAT) regime was put in place.

Inaugurating a seminar on VAT, the Minister said sales tax collections constituted the main source of revenue for the State, and any minor changes in the taxation structure would trigger repercussions in the State's financial status.

According to Mr. Sankaranarayanan, the existing tax structure was established 38 years ago and there had been longstanding demand for effecting amendments.

The anomalies in the tax structure were not only a handicap for industry, but also causing price spiral in products, which were being driven back by competitors at the national and international arena, the Minister said. He appealed to the sectors of industry, trade, chartered accountants, advocates and tax practitioners, besides the bureaucracy, to cooperate with the efforts to implement a new tax regime.

According to Mr. Sankaranarayanan, the fresh tax regime would only be fixed on the basis of the periodic value addition of production and marketing. Moreover, there was provision for tax rebates on not only raw materials but machinery and other trade accessories as well, he pointed out.

The Minister promised that the draft VAT proposals would be formulated only after an exhaustive discussion with all sections and the consensual process repeated before a final decision taken.

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Section  : Southern States
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