A delegation of Nag Vidarbha Chamber of Commerce under the Presidency of Shri Dipen Agrawal, President of the Chamber met Shri Rajendraji Mulak, Hon’ble State Minister for Finance, Energy, Planning, Water Resources, Parliamentary Affairs and State Excise, on 24th December, 2012, at his residence, Nagpur.
Shri Dipen Agrawal, President welcomed Shri Rajendra Mulak by presenting a shawl, shriphal, bouquet and a memento and also he handed over a Memorandum about various issues pertaining to Value Added Tax (VAT) as follows:-
- 1. Issues related to VAT:-
Overall we see and it is a matter of concern that Maharashtra is losing its number one position for which we talk about promoting investors in Maharashtra but we oversee and look at the present industries being shifted to other states in the process. To address this problem that is being faced by the entire trade and industry community at large.
1a. VAT Refunds.
Numbers of assesses are complaining that they are not getting refunds of VAT from the sales tax/VAT department. In many cases refund audit is not completed in stipulated time & regular assessment proceedings are initiated by the department to delay the refund. Huge amount of refund due to the dealers are blocked resulting in financial hardship to the dealers.
It is suggested that concerned in the MVAT Department be directed to initiate early action for refunds of VAT deposited by the traders. Further considering the difficulties and long drawn process for issue of refund, it is suggested that the assesse be permitted to carry forward set off/refund from preceding financial year to next financial year as is available under CENVAT CREDIT SCHEME of Central Excise this will save the assesse from financial hardship arising from delayed refund and payment tax in first quarter of next year. This will be win-win situation for both the assesse & department also, as both are relived from the burden of tedious process of refund.
1b. VAT Credit:-
If material is purchased from registered dealer and that dealer charges vat in its invoice but does not deposit the VAT amount with the department, then the VAT credit should not be denied and recovery action should be initiated against the registered dealer.
1c. High Handedness by the Sale Tax Department:-
An industrialist or trader is a falicitator to the department who collects tax on behalf of the department and deposits the same with the department. During the process due to some negligence or wrong filling of returns the industrialist fails to pay the desired amount and later agrees to pay the sum. In spite of the industrialist agreeing to pay the liable amount to correct his mistake; the department initiates a criminal action and files a FIR to harass the industrialist or trader. We want that strict orders should be given to the department to avoid harassing people in this way.
1d. Problems Faced By Citizens Of Maharashtra Due To Imposition
Of VAT On Construction.
We wish to bring to your kind notice that 5% VAT on construction imposed by State Government from 2006 to 2010 and thereafter 1% should be abolished with immediate effect. Citizens of Maharashtra are already facing hardships due to high cost of building material along with land construction cost.
Hence, we sincerely request you to kindly abolish the same with immediate effect. (Enclosed Details of above said issue in (ANNEXTURE-1)
1e. Abnormal rate of VAT on Surgical items
We would like to appraise you that VAT is @12.5% on surgical goods whereas in all other States have a uniform VAT @5% (earlier 4%).
Sir, this higher VAT does not help the State Government’s revenue and causes huge business losses to traders and manufacturers of medical products in the State.
Further all high priced products are supplied directly from other States since the VAT is less, with the result Maharashtra gets ‘zero’ revenue. In all big traders of the Hospitals again the Maharashtra dealers and manufacturers are not able to match the offers of dealers/manufacturers of other States as one paying higher VAT and over and above this there is Octroi which adds to the problems.
Shri Rajendra Mulak, Hon’ble Minister patiently heard the problems explained by the delegation and briefed that the problems indicated in the Memorandum would be looked into and solved after consulting with the department in the interest of business community as well as assesses and result would be communicated during his visit to NVCC shortly.
Sarvashri Jaiprakash Gupta, President, Nagpur Nagar Congress Committee, Mayur Panchmatia, Vice President, Hemant Gandhi, Hon. Secretary, Manubhai Soni, Sachin Puniyani and Ashok Sanghvi, Jt. Secretaries were present during the discussions with the Minister states in a press note issued by Shri Hemant Gandhi, Hon. Secretary of the Chamber.