Workshop on VAT in Chennai
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| From Left: Mr. Mr. K. Vaitheeswaran, Tax Consultant, Mr. Murugan, Dy. Commissioner, Commercial Tax Department of Tamil Nadu and Mr. M. Rafeeque Ahmed, Past President, FIEO |
The Southern Region Office of FIEO organized a "Workshop on VAT" on 31st January in Chennai to make the exporters of the region aware of the implications of VAT to be introduced by Tamil Nadu from 1st January 2007. More than 70 exporters from the State attended the Workshop.
FIEO’s Past President Mr. M. Rafeeque Ahmed while welcoming the participants to the Workshop informed that in the current system of commodity tax, a commodity was loaded with multiple levies on inputs, intermediary, etc. besides other taxes such as turnover tax or entry tax compelling the manufacturers for vertical integration and thus jeopardizing efficiency in the process. The opportunity of innovations in small enterprises gets diminished in the current tax regime, he said. Under VAT, he hopes, the incidence of tax will be visible and manufacturers would find their tax planning becoming easier.
Differentiating VAT from conventional sales tax, Mr. G. Shanmugam, Joint Commissioner of VAT Cell, Commercial Tax Department of Tamil Nadu said VAT is levied on every taxable sale, but it is reimbursed on the purchases, so the Vat is applied only to the value added to the goods at each stage of production, whereas sales tax is normally charged only on final sales to consumers. He added that because of reimbursement, VAT had the same overall economic effect on final prices. The main difference, according to Mr. Shanmugam, is the extra accounting required in the case of VAT by those in the middle of the supply chain. But he quickly adds that this disadvantage of VAT is balanced by application of the same tax to each member of the production chain regardless of its position in it and the position of its customers.
Mr. K. Vaitheeswaran, Advocate and Tax Consultant made a detailed presentation covering the implications of VAT for the exporters.
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FIEO Chief calls Rail Budget as ‘progressive’ FIEO President Mr. Ganesh Kumar Gupta has called the Rail Budget as ‘progressive’ and has complimented the Hon’ble Union Railway Minister Mr. Lalu Prasad Yadav for providing a growth oriented budget while simultaneously facilitating passenger travel. He particularly hailed the announcement of setting up of high-speed freight corridors between Mumbai and Ahmedabad and the introduction of double-stack container trains between Pipapav and Jaipur. He also hailed the announcement of introducing triple stack-container train on diesel route shortly. FIEO Chief exuded confidence that these measures would bring down the railway freight and impart efficiency to the movement of containerized cargo in the long run. He, however, added that he was expecting reduction in freight rates, especially inland freight cost for imports and exports, which would have helped curb general inflation. |
