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New VAT rates declared in MP

Shashikant Trivedi  |  New Delhi/ Bhopal 

Under intense pressure from small traders and in the absence of a proper account data management system, the has amended the value-added tax (VAT) rates on some items.
While this paper carried a item regarding this on May 18, the state government made a formal announcement on this yesterday.
Further, an option of composition by traders has been extended till June 30. Items that will attract now zero per cent VAT are sugarcane, handmade soap, handmade paper, handmade toothpowder, joss sticks, dhoop, gamchha, bed sheets, all certified seeds barring a few, and equipment used by the deaf and dumb.
Commodities like saboodana, sweets, namkeen, and items used in real estate defined as "tasla, tagari", rope, dori (thread), copper wire rod, copper wire bar, copper cathode, copper binding wire, enamelled copperware, bare copper wire, wick/pressure stove, Dhamela, crowbar, AA/AAA conductors, paper cone, bobbin, dextrin, dextrose Monohydrate, cigarette filter rod, Gallatin, Chakki, Chakki Pat (grinding stone), paraffin wax, flavoured milk, power tiller, plastic scrape, will attract 4 per cent VAT, instead of existing 12.5 per cent.
"The state sub-committee on VAT is further mulling over reducing the tax on shoes costing Rs 150 price or generally used by poor people. The committee is likely to reduce VAT on the item in its next meeting," said a government spokesperson.
The Tukojirao Cloth Merchant Association, Indore, has also urged the government to exempt quilt, cotton mattresses and pillow covers from VAT.
The state sub-committee on VAT also decided to offer rebate of over 4 per cent tax on plant machineries and parts used for generation and distribution of power energy.
The facility of composition has been restored to the contractors. Full rebate has been provided on export after manufacturing tax-free goods.
Sales of canteen stores run by defence services have been exempted from value-added tax and a rebate of 4 per cent tax paid will be offered to these canteens. Kerosene sold under the public distribution system has been kept out of the purview of VAT.
Now only the first seller in the state would have the tax liability.

First Published: Wed, June 07 2006. 00:00 IST