'Traders response to VAT disappointing'

While traders are expecting their VAT (value-added tax) related problems to be redressed during the ongoing review of the three-month experience of the implementation of new tax system by the Andhra Pradesh government, the state commercial taxes authorities have come up with their own grievance on the 'non-compliance' of almost 50 per cent of the dealers who registered under VAT.

Speaking in an interactive session on VAT, organised by the CII-Andhra chapter here on Tuesday, V Bhasker, commissioner of commercial taxes department, said that half of the VAT assessees in the state have not paid any tax post VAT. "The department has trusted the traders so far as tax compliance was concerned but they did not reciprocate our trust," he said.

According to Bhasker, the growth in tax collections by June, 2005 in Andhra Pradesh has been just 3 per cent while the national average growth in tax collections during the period is 20 per cent.

Growth in tax collections after the introduction of VAT is 38 per cent in Karnataka, 77 per cent in Punjab, 59 per cent in Orissa and 20 per cent in Delhi, he said. Maharashtra is the only other state, which stood on par with Andhra in terms of growth in tax collections up to June, 2005. "We will certainly review the implementation of VAT in this aspect too," he said.

Of the total 1.17 lakh dealers registered under VAT, 20,858 have not filed any returns while 16,588 assessees filed nil returns during the month of June, 2005. Another 18,154 dealers have filed credit returns, as per which the department owes payment to them, according to the commissioner. He also expressed his unhappiness on traders and companies for not transferring the tax reduction benefit to consumers.

T G Ramakrishnan, manager ( indirect taxation) of Hindustan Lever Limited, who spoke on FMCG perspectives suggested that the tax authorities do away with the present discrimination between branded and non-branded goods in taxation.