The Hindu : CII wants officials trained on VAT

Online edition of India's National Newspaper
Monday, Oct 21, 2002

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CII wants officials trained on VAT

By Our Special Correspondent

NEW DELHI Oct. 20. Outlining several issues that need to be addressed to make way for the smooth introduction of the long-awaited value-added tax regime from April 1, the Confederation of Indian Industry has focused on the need for the States and Union Territories to make preparations at the state-level for the changeover.

In a note prepared by the trade and industry body, the States and Union Territories have been asked to provide training and orientation to the officials concerned. There should be full accountability, besides provision for rewarding good performance.

Computerisation ought to be undertaken on a war-footing. While it would be important to simplify the procedures, it would also be vital to design an efficient penalty and appeal system, the CII said. The note, which has been presented to the Empowered Committee on VAT, has said that as a basic principle, exports should not have any type of tax to make the exported goods competitive in the international market. There was therefore a need to allow input credit for VAT paid on the local purchases and excess credit should be refundable.

Also the set-off mechanism should be uniform in all States as it would facilitate inter-state trade and reduce complexity. The documentation for set-off must be prescribed and should be in a standard format.

While assessees should be permitted to print their own stationery of statutory declaration forms, the requirements in documentation should be listed to curb fraud and misuse.

If the CST is allowed to continue when VAT is introduced, it would be appropriate to decrease the four per cent CST over a period of time as the difference between VAT paid on local inputs and CST paid on the output within the same State would increase especially where inter-State exposure is high, the note said, favouring a destination-based tax system for inter-state trade.

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