The State government on Tuesday introduced three bills in the Assembly to amend the legislation governing Value Added Tax. These amendments proposed to increase the rate of interest accruing on outstanding VAT payments and remove exemptions to certain items.

The amendments were introduced in the Assembly by Commercial Taxes and Registration Minister BV Ramanaa, and are set to come up for discussion and approval on May 16, the last day of the ongoing Budget Session of the Assembly.

The first amendment introduced on Tuesday proposed an increase of interest on delayed VAT payments from the current 1.25 per cent to 2 per cent. The move is meant to curb instances of traders intentionally choosing to delay VAT payments in view of the lesser interest it attracts compared to other financial instruments.

The second amendment introduced on Tuesday proposed to cancel the VAT exemption presently given to germicides, disinfectants and gypsum. An explanatory note from the government said these articles had been given VAT exemption on the basis that they were used by farmers. But in view of the fact that this exemption was used more by other sectors than agriculture, there is a need to remove the exemption.

The third amendment proposed by the government sought to correct the anomaly arising out of the inclusion of the terms iPod and iPhone as generic terms.

The amendment seeks to include these products under the generic heads of music players and mobile phones respectively, in view of the fact that these are proprietary products rather than generic product names.