Date:23/02/2006 URL: http://www.thehindubusinessline.com/2006/02/23/stories/2006022302091900.htm

Back TN Chamber wants State to withdraw Resale Tax

Our Correspondent

Madurai , Feb. 22

TRADE and industry feel let down over the recent announcement of relief measures and schemes by the Tamil Nadu Chief Minister.

Despite being instrumental in collection of Commercial Taxes of Rs 15,000 crore per year, their demands have not been addressed by the State Government, they say.

The Tamilnadu Chamber of Commerce and Industry, in a statement here, said that it had forwarded a memorandum to Tamil Nadu Chief Minister drawing attention to the handicaps faced due to non-implementation of Value Added Tax (VAT) in the State.

The cost of production and selling prices in VAT implemented States are much lower than in the State as the rates of tax under VAT are comparatively lower than the prevailing sales tax rates in Tamil Nadu. Moreover, other taxes like Additional Sales Tax, Resale Tax and Surcharge which are now enforced in Tamil Nadu along with sales tax have no place in the VAT regime. While traders with annual turnover ranging from Rs 5 lakh and Rs 10 lakh are exempted from VAT, the annual turnover limit for sales exemption in the State is only Rs 3 lakh.

This high detrimental impact has activated flight of trade and industry to other neighbouring States, curtailed employment opportunities and dealt a setback to the economic development in the State.

The chamber has appealed to the Tamil Nadu Chief Minister to make an immediate announcement scrapping Resale Tax and enhancing the sales tax exemption limit to Rs 10 lakh to rejuvenate the sagging morale of trade and industry in the State and enthuse lakhs of businessmen, their workforce and their family members across the State.