TN govt network to assess transactions

With Tamil Nadu also joining the VAT regime on January 1, 2007, the state government is in the process of setting up a computerised network across the state for recording transactions, said G Shanmugam, Joint Commissioner of Commercial Taxes (VAT).

Ten computer centres, including two in Chennai, would be set up across the state for scanning the transaction bills submitted by traders while filing their taxes.

For intra-state dealings, these centres will exchange records, which would enable the Commercial Tax Department to cross-check and verify the authenticity of the bills, Shanmugam said.

Considering that the auditing mode of taxation would essentially be based on self-assessment, these records would provide an effective check on fraudulent practices, including the production of fake bills.

In the case of inter-state dealings, the Tamil Nadu government can approach the Empowering Committee in New Delhi for records of transactions happening in other states.

Additionally, the enforcement wing will provide a random check of assessments not exceeding 20 per cent in a period of five years. The audit wing might also conduct checks in cases of exorbitant input tax credit claims.

"In addition to these computer centres, the state government is also in the process of setting up 40 call centres to clarify the doubts of dealers regarding the procedures under the VAT Act," Shanmugam said at an interactive session organised by The Tamil Chamber of Commerce.

"Initially, the government might incur losses under the new regime, but we believe that more people will come forward to pay their taxes, which will compensate for the initial losses," he added.