Business Standard

VAT ceiling for filing returns may be raised

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The empowered committee of state finance ministers on (VAT) is considering a proposal to hike the upper limit of the annual gross turnover for filing returns from Rs 40 lakh to Rs 50 lakh.
 
The committee today endorsed the white paper on VAT, which will be introduced from April. The white paper will be formally released by Finance Minister on January 17.
 
"I am very happy to announce that the white paper has been finalised and that the empowered committee has endorsed it," West Bengal Finance Minister said after a meeting of the panel.
 
The meeting, which reviewed the progress on VAT, noted that 15 states had sent their for Presidential assent.
 
An official of the empowered committee told Business Standard requests had been received from several states, including Uttar Pradesh, Maharashtra and Delhi, to increase the upper turnover limit for filing VAT returns to over Rs 40 lakh so that smaller dealers were spared from maintaining the books and filing returns.
 
As per the draft white paper, returns furnished by dealers will be scrutinised expeditiously within four months from the date of filing of returns.
 
The official, however, pointed out that no decision had been taken on the demand made by some states to simplify the audit norms.
 
"Since the VAT is based on the invoice-audit system, it is difficult to concede to that request," the official said.
 
Dasgupta said the committee had interacted with national-level trade and Industry bodies, which had pointed out ground-level difficulties in implementing the tax and demanded a more liberal penal clause for non-compliance.
 
"We will try to accommodate the views of traders on ground-level difficulties. It is our collective effort to reduce the difficulties," Dasgupta said, adding that there would be a system of self-assessment instead of an "inspector raj" regime.
 
He said Uttar Pradesh Chief Minister had assured the panel that the state favoured VAT in principle but wanted to ensure that it was trader-friendly. Finance Minister P Chidambaram is slated to visit the state soon to resolve outstanding issues of traders.
 
"Certain issues have been pointed out to the empowered committee, but a final decision will be taken by the chief minister," Dasgupta said.
 
The state also wanted that more than 10 items be allowed to be treated as "local importance goods", considering the diverse manufacturing activities.
 
Dasgupta ruled out changes in VAT rates as demanded by traders, saying: "It is part of the VAT Bills, which is the prerogative of states."
 
The VAT panel will also look into the cut-off points that will determine whether a trader comes under the VAT net or not. The panel would clear the doubts in the white paper and VAT Bills, he added.

 
 

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