J&K traders against the new Value Added Tax (VAT) Returns Forms
April, 21st 2011
While the Jammu and Kashmir Government is still to come to grips with the proposed imposition of property tax in Jammu and Kashmir, it is faced with another revolt from the trading community in Kashmir. This time, the Valley-based traders are up in arms against the proposed filling up of new Value Added Tax (VAT) Returns Forms, which they believe was an attempt to harass to business community in the Valley.
The Commercial Taxes Department has asked the traders to fill up the new Quarterly VAT Return from July this year, citing computerization of the departmental activities. But the trade community is in turn threatening to protest the decision on the grounds that the new document was aimed at harassing them.
At the moment, the traders said, they fill up a one-page document as Quarterly Return. But the new 7-page document is altogether different, having scores of columns and hundreds of details to be filled up.
It has been five years since the Value Added Tax is being implemented in Jammu and Kashmir. During this period, we used to fill up the one-page easy document which contained the details about the sale and purchase, inter and intra state purchases and the tax returns. But the new form is completely different.
It is futile and unnecessary and is just aimed at harassing the trader community, said Jan Muhammad Kaul, President of the Kashmir Traders Federation, one of the oldest associations of traders in the Valley.
Trashing the computerization argument, Kaul argues that 95 percent traders in Kashmir are yet to switch over to computers in their functioning. We are not against the computerization of business, but over 90 percent of traders in Kashmir still use plain copies and day-books in their financial dealings. It would be impossible for them to fill up the new VAT Return forms, he told Greater Kashmir, asserting that the state government should stop harassing traders in the Valley or face revolt.
The new form, copy of which is with Greater Kashmir, has at least 12 headings (from A to K) which are required to be filled up. These include Dealer Information; Filing Status; Details of Turnover/Transfers; Summary of value of goods returned (sales); Rate-wise bifurcation of Sales and Output Tax; Details of Purchase and Receipts; Summary of value of goods returned (Purchases); Input Tax Credit and Purchase Tax; Tax Payable/Refundable; Deposit Details; and Declaration.
Under each heading, there are scores of minor and major mathematical details that have to be filled up. These include Gross turnover; turnover of tax-free sales; turnover of export; value of stock transfer or consignment transfer in the course of inter state; value of stock transfer of consignment of the inter-state trade and commerce; interstate sales to registered dealer; interstate sales to unregistered dealer; turnover of goods which are zero rated; local sales rate-wise bifurcation; inter-state sales; export sales; purchase from registered dealer outside state; purchase from unregistered dealer from outside the state; value of purchased goods returned; total purchases and receipts.
According to traders, the new form would force many of them to close down their business establishments. We fail to understand the need to issue such a form if the existing one is working fine for the past five years, Kaul said. Our advice to the state government is that they must revoke the new forms in the larger interests of the traders community in Kashmir, which has already suffered a great deal in the past 20 years. Or else we shall be forced to protest against the move, which is an extreme step being taken by the state government.
A number of traders, who spoke to Greater Kashmir, alleged that the decision is being taken in the backdrop of 2010 unrest in Kashmir as punishment to the traders for supporting the strike calls announced by the pro-freedom leadership. Some of them, however, argue that the decision was being taken because traders in a particular region of the state were not providing all the documents to the commercial taxes department along with the VAT Return form they are currently filling. By taking such extreme steps, the state government is punishing us, said a group of traders.
The new form has at least 500 to 600 minute details to be filled up. It would be dead impossible for poor Kashmiri traders to fill them up. Given the length of the form and the details asked therein, it amply demonstrates that the state government wants to harass the traders, thereby forcing them to toe their line. But well resist the move tooth and nail.
On Wednesday, the Kashmir Traders Federation held an emergency meeting to discuss the issue. The members strongly resisted the fresh decision, urging the Chief Minister and the Finance Minister to revoke the new forms. The Federation formed a committee of traders, who are likely to meet the Chief Minister Omar Abdullah to discuss the issue. The committee members include Zahoor Ahmad Shah, Haji Ghulam Muhammad Wani, Ali Muhammad Bhat, GA Laigaroo and Showkat Hussain Ahanger.
The new VAT form issue is surfacing barely few days after the state government shelved the proposed imposition of tax on properties in the state. The decision evoked stiff resistance from the traders and separatists in Kashmir, following which the Legislative Council sent the property tax bill to the select committee for further discussion.
When contacted the Commissioner (Commercial/Excise Taxes), GA Peer, said they have added certain columns to the VAT Return to make it more transparent. The traders are otherwise supposed to maintain records of everything. The only thing is that we have asked for a break-up in respect of sales and purchases. We have gone in for computerization.
There is a computerization project we are undertaking. This move will ensure that the traders are able to file returns online and also have all the formats online, he told Greater Kashmir.
He said the traders were mixing details about sales, purchases and tax which would make it difficult for their audit officers or sales tax officers to analyze. Our officers often call the traders to their offices for clarification on different issues. If they give us detailed information, then they need not visit the offices, Peer said.
He said the traders have also been asked account of every business place. They have to maintain this information separately which they are not ready to give. If you have a business place at Rajbagh and another at Khanyar, they will have to reflect the transfer of goods. They want to project everything in a joint manner.
This doesnt give a lucid picture about things. The thing is that with new Returns, they may have to provide some supporting material, he said.
Peer, however, agreed that it would be a bit cumbersome for small traders. We can consider some relaxation for small dealers, but with the dealers having good turnover, it would be a good thing. It will serve their precious time and the time of our officers as well, he said.
He said if the traders are apprehensive about the move, they can discuss the issue with him or the Finance Minister. They can project their grievance before us in an amicable manner. They are respectable people and we believe in interacting with them. If any changes are required to be done, we can do that if we feel they are genuine in any respect, Peer said.