Fapcci resents 12.5% VAT on capital goods

The Federation of Andhra Pradesh Chambers of Commerce and Industry(Fapcci) today expressed its displeasure over the Andhra Pradesh government's decision to bring capital goods and industrial inputs under 12.5 per cent value-added tax (VAT) rate, terming that the move will seriously impact the small and medium sector.

The Federation on Friday appealed to the chairman of the Empowered Committee of state finance ministers to ensure the uniform compliance of the White Paper issued on VAT by all states.

In a representation submitted to Asim Das Gupta at Delhi, Nitin K Parekh, chairman of trade&commerce, committee of Fapcci pointed out that just 91 out of 270 products have been brought under 4 per cent VAT rate in Andhra Pradesh while the White Paper of the Empowered Committee says that under 4 per cent VAT rate there will be largest number of goods(about 270) common for all states comprising items of basic necessities such as medicines and drugs, all agricultural and industrial inputs, capital and declared goods.

The representation also said that the very purpose of the introduction of VAT will be defeated if each state tinkers with the objects of the tax reforms.