Rajkot traders demand removal of Vat disparities

Rajkot, Jan 22 | Updated: Jan 23 2007, 05:52am hrs
The Rajkot Chamber of Commerce and Industry (RCCI) has demanded simplification of tax structure in the upcoming annual budget of Gujarat. The industry body has also urged the state minister for finance Vajubhai Vala to remove disparities in the various provisions of the Vat Act.

In a memorandum submitted to the state finance minister, the chamber has pointed out that some of the disparities in the Vat Act and has asked the state government to remove those disparities.

Speaking to FE, Hitesh Bagdai, president, the Rajkot Chamber of Commerce and Industry, said, As per the section 9 of the Vat Act, a trader is liable for purchase tax if he purchases goods from any unregistered trader. That trader is also eligible for input during tax period. Sales tax department is of the view that a trader should pay purchase tax and then opt for its rebate. This leads to a dispute between traders and the department. In order to resolve this issue, we have demanded a clear interpretation of the section 9 of the Vat Act.

The association has also demanded a second bench of tribunal to dispose sales or Vat application. The industry body has argued that sometime it takes more than 10 years to dispose such applications. In such circumstances, a second bench of the tribunal is required.

Another important point that RCCI has made is that there is provision of input tax credit on addition fuel expenditure incurred to various industries like foundry, ceramic, forging, brass part, auto part, oil mills and solvent plants.

However, these industries do not get rebate on input tax credit, which escalates the prices of final products. Considering the fact the industry body has demanded removal of section 11 (3) in the Vat Act.