The Tamil Nadu Government plans to amend the VAT (Value Added Tax) Act to enable clarity for exporters claiming input tax credit.

Moving the demand for grants to his department, the Commercial Taxes Minister, Mr S.N.M. Ubayadullah, said the Act provides for exporters to claim input tax credit within 180 days of incurring input tax. However, this would be amended to state that exporters could claim input tax credit from the date of exports. This was for the convenience of exporters.

The Section 18(3) specifies that adjustment of tax or claim of refund shall be made within 180 days from “the date of accrual of such input tax credit”. This will now be amended to read “from the date of zero rate sale,” he said.

e-governance

The Commercial Taxes Department is set to launch a major initiative in e-governance for which it would identify a private partner for a Public-Private Partnership project. As of now, the entire department and its offices have been computerised.

The PPP would be aimed at providing comprehensive services online, which would enable traders and the general public interact with the department online, he said.

Traders will also be able to file their monthly returns and pay taxes online. Traders who had paid Rs 200 crore and more last year will have to pay before the 14th of each month, and the others before the 22nd.

Revenue Collection

According to the Policy Note for 2009-10, commercial taxes account for nearly 70 per cent of the State’s revenue. In 2008-09, Tamil Nadu’s tax revenue grew 13 per cent over the previous year.

The State introduced VAT in January 2007 and to compensate for the dip in tax collections, the State has claimed a compensation of Rs 5,024.74 crore for calendar years 2007 and 2008.

The Central Government has provisionally sanctioned Rs 3,040 crore and the balance is due.

On the phasing out of Central Sales Tax, the Tamil Nadu Government has sought a compensation of Rs 863.33 crore for 2007-08. The Centre has sanctioned Rs 647.54 crore.

For 2008-09 the State has claimed Rs 1,854.72 crore.

Tax revenue break-up

Out of the total collections VAT accounts for Rs 19,440 crore during 2008-09 against Rs 16,472 crore in the previous year; Central Sales Tax was Rs 1,653 crore (Rs 1,744 crore); Entry Tax on Vehicles and Goods was Rs 996 crore (Rs 1,125 crore) and Luxury Tax Rs 170 crore (Rs 160 crore).

Source : The HinduBusinessLine, India, dated 09/07/2009