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Traders have to register under VAT regime

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Small dealers, even at the level of a small grocery shop with a gross turnover of Rs 5 lakh and above per annum, will need to register under the value added tax act (VAT) regime. All states except Uttar Pradesh are set to implement VAT from April 1, 2005.
 
Bengal National Chamber of Commerce & Industry (BNCCI) today held a discussion on 'Impact of VAT in West Bengal'.
 
Saradindu Biswas, president, All Bengal Tax Bar Association, explained that under the new regime only the registered dealers can collect and pay taxes and therefore registration would be compulsory.
 
Though voluntary registration would be allowed for those exceeding a gross turnover of Rs 2.5 lakh per annum, there will be no registration requirement for those below that level.
 
He explained how VAT liability will be calculated by deducting input tax credit from the tax collected by the dealer during the payment time at the meeting to businessmen and managers present, including the two basic rates of VAT, 4 per cent and 12.5 per cent.
 
States will benefit from tax credit only in case of stock transfer of the output within a state, he noted.
 
"Tax paid on inputs procured from other states through stock transfer or inter-state sale will not be eligible for credit," said Biswas. Sugar, textile, tobacco will remain tax exempted from VAT for one year, he added.
 
Biswas explained that according to the prescribed VAT format, small dealers with gross turnover below Rs 50 lakh may also opt for a 'composition scheme' paying 1 per cent of tax on the turn over, though they shall not be thereafter eligible to issue tax invoice.
 
Manufacturers and importers will though not come under this scheme, he pointed.
 
Biswas also informed that as there was no prescription in the VAT act regarding the taxation for 'corridor transaction', the system will remain the same.

 
 

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