Transition to GST regime smooth in TN

CHENNAI : Dealers and businesses will be filing the last of their Value Added Tax returns today as the next filing will be under the new Goods and Services Tax.

This will mark the phasing out of the Tamil Nadu Value Added Tax regime which came into effect from January 1, 2007.

According to the officials concerned, after the GST kicked in on July 1, Tamil Nadu has made a smooth transition to the new tax regime with more than 90 per cent of the 6.56 lakh dealers registering on the new GST portal. Except for about 2,200 dealers, the rest have been given their provisional identity numbers and over 6 lakh dealers have signed up on the GST portal. The remaining are either in the exempted goods or trade below the threshold limit.

The transition happened seamlessly as dealers in Tamil Nadu were already filing VAT returns online and were familiar with the electronic systems. Under GST, they simply had to migrate to a new portal. Most of the queries and clarification received at the call centres from dealers related to tax rates rather than procedural issues, the official said.

 

  

While the initial revenue trends under the GST will be known only from September when the first of the GST returns will be filed, officials said there is cause for optimism.

Industry has generally welcomed the new tax format as it recognises that costs will reduce down the line and as a broad rule, the consumer will also benefit. If sectors like hospitality industry claim that food prices have gone up for the consumer, it is only because they have not passed on to the consumers the benefits of input tax credit they claim from goods and service providers, asserted the official.

On the structured package of incentives given under VAT to large investments in manufacturing, officials said that this had been provided as a refund after the companies paid their tax.

This can continue under GST, while the refunds will be on a lesser scale as the State can refund only the portion of the tax paid on local sales. It will only mean the companies will take longer to recoup their incentive.

As a manufacturing hub, Tamil Nadu may take a hit initially but it is also a major consumption centre, which will help it offset the loss in revenue.

Source:::  Business Line, dated 11/07/2017.