Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: empanelment :: ACCOUNTING STANDARD :: ACCOUNTING STANDARDS :: VAT Audit :: TDS :: form 3cd :: articles on VAT and GST in India :: ARTICLES ON INPUT TAX CREDIT IN VAT :: cpt :: Central Excise rule to resale the machines to a new company :: due date for vat payment :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: list of goods taxed at 4% :: VAT RATES :: TAX RATES - GOODS TAXABLE @ 4%
« VAT (Value Added Tax) »
 Understanding VAT refunds
  Note ban got Maharashtra govt an extra ?125cr from fuel VAT
 Note ban got Maharashtra govt an extra ?125cr from fuel VAT
 Higher tax mop up reflects no slowdown post demonetisation, says Arun Jaitley
 Traders transition from VAT to GST
 FM Arun Jaitley defends note ban with jump in tax numbers
 States record jump in VAT collections after note ban
 Migration from Value Added Tax to GST begins
 VAT is coming: a historic change and leap into the unknown
 Online sales clampdown nets VAT registrations
 Telangana House passes Bill to reduce VAT on cell phones

TN govt gives BMW tax relief in public interest
June, 16th 2008

At a time when state governments are asking for higher compensation to offset the revenue loss due to the reduction in the rate of central sales tax (CST), which has been brought down to 2%, Tamil Nadu has opted to provide a further CST cut as a fiscal incentive to German auto major BMW, which runs a manufacturing plant in Chennai.

The Tamil Nadu government, in March this year, reduced the CST rate on passenger cars and components manufactured by BMW India Ltd by 1%, citing public interest. The auto company now has to pay only 1% CST.

BMW India president Peter Kronschnabel said, The 1% tax relief was a standard proposal from the state government in the negotiation for the memorandum of understanding with the company earlier in 2005. The company does not absorb the tax relief in its margins but passes it on to its customers, he added.

While CST is essentially a state subject under the Constitution, which allows state governments to take individual decisions on the tax rate and exemptions, the Centre is not too happy with states providing such tax benefits.

The Union finance ministry has made it clear that it will only compensate states for the losses that accrue to them due to the 1% cut on CST under its phase-out plan, and not for such exemptions, an official source said.

The state governments decision on BMW was made at a time when the phase-out process of CST was stalled by nearly two months as states had objected to increasing the rate of value added tax (VAT) and had, instead, pushed for a higher monetary compensation from the Centre. While the Centre decided to notify the tax cut last month, the stalemate still continues.

In fact, Tamil Nadu, Karnataka, Maharashtra and Gujarat have been the most vocal opponents to a hike in the VAT rate to compensate for their revenue losses, sources close to the development said.

Although Ford Motors, with manufacturing facilities in Tamil Nadu for several years, also enjoys a similar tax concession from the state government, it was awarded much before the VAT regime came into place.

In 2008-09 states are expected to get about Rs 6,000 crore as compensation from the Centre for reducing the CST rateless than half of their original demand of monetary support of Rs 13,000 crore.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Application Management Solutions Application Management System Application Management Software System Application Management Development Application Management Software Development

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions