Trade bodies oppose amendment in VAT Act, give govt 15 days time
May, 29th 2013
Apex trade bodies of the state led by Gujarat Chamber of Commerce and Industry (GCCI) have decided to move court opposing the amendment in Gujarat Value Added Tax (VAT) Act 2013 and gave the state government 15 days' time to solve the issue.
According to them, it was posing transactional problems. "It is impracticable and not acceptable," said Chamber president Prakash Bhagwati.
GCCI president Prakash Bhagwati and its VAT Committee Chairman Nayan Sheth explained the problems arising out of the newly added sub-section 7 A to Section 11 of VAT Act.
The tax amendment was done by the state government in budget 2013-14 and notified recently, after the assent of the Gujarat Governor. It came into effect from April 1, 2013.
The notification says that if a vendor has not paid tax collected on sales to the government treasury, the buyers' "input tax credit" will be disallowed to that extent.
It has led to a situation whereby if any registered dealer or trader for any reason forgets to deposit the tax collected by him in the government, then the purchaser will not get the input tax credit to that extent, a GCCI statement said.
The government will directly collect tax from the purchaser and also wrong input tax credit taken by purchaser will attract penalty of 150 per cent. Besides, interest would be levied on that, it stated.
Meanwhile, during the meeting on Tuesday, it was decided to represent the case before the Chief Minister Narendra Modi.