Kochi: The Cochin Rubber Merchants Association has suggested that the State Government should withdraw the new budgetary provision denying the refund of excess tax paid on stock transfer and take measures to refund the excess tax paid on interstate sales within a time frame of three months.
N. Radhakrishnan, President of the Association, in a statement issued here pointed out that in the recent budget proposals for 2008-2009, the State Government withdrew the provision for refund of the difference between VAT and CST on stock transfer which will amount to Rs 90 crore during this year.
This policy is likely to boomerang as it will motivate the tyre companies and other large non-tyre sector companies to import more rubber, he said.
In 2007-08, the State consumed over 1.5 lakh tonnes of natural rubber and supplied 5.75 lakh tonnes to other States and exported around 50,000 tonnes.
Tyre companies bought around four lakh tonnes from the State and transferred the same to their own factories in other States.
Most of the non-tyre sector consumers bought either through their agents in the State or purchased directly from dealers.
Irrespective of inter-state sales or stock transfer, the State Government allowed refunding the excess VAT paid i.e. the difference between VAT and CST in 2007-08.
The Centre allows import of bus and truck tyres at 10 per cent duty and this policy has paved way for large scale imports during 2007-2008.
Therefore, import of tyres in large quantity will adversely affect the consumption level and such an eventuality will jeopardise the interest of over a million small and marginal rubber growers.
In the circumstances, the association said that the State Government should not put any further burden on the tyre companies and others by withdrawing the refund of tax difference, especially when the entire amount is refunded to the State by the Centre.
The Association also pointed out that the new provision to impose one per cent cess is a retrograde measure which goes against the ethics of VAT regime and, therefore, this provision may please be withdrawn.
The new proviso regarding sister concern is vague and unwarranted as sister concern transact business like any other genuine dealer.
Any fear of misrepresenting prices can be vouched as the prices are daily quoted in news papers and also at the Rubber Board site, he said.
N. Radhakrishnan, President of the Association, in a statement issued here pointed out that in the recent budget proposals for 2008-2009, the State Government withdrew the provision for refund of the difference between VAT and CST on stock transfer which will amount to Rs 90 crore during this year.
This policy is likely to boomerang as it will motivate the tyre companies and other large non-tyre sector companies to import more rubber, he said.
In 2007-08, the State consumed over 1.5 lakh tonnes of natural rubber and supplied 5.75 lakh tonnes to other States and exported around 50,000 tonnes.
Tyre companies bought around four lakh tonnes from the State and transferred the same to their own factories in other States.
Most of the non-tyre sector consumers bought either through their agents in the State or purchased directly from dealers.
Irrespective of inter-state sales or stock transfer, the State Government allowed refunding the excess VAT paid i.e. the difference between VAT and CST in 2007-08.
The Centre allows import of bus and truck tyres at 10 per cent duty and this policy has paved way for large scale imports during 2007-2008.
Therefore, import of tyres in large quantity will adversely affect the consumption level and such an eventuality will jeopardise the interest of over a million small and marginal rubber growers.
In the circumstances, the association said that the State Government should not put any further burden on the tyre companies and others by withdrawing the refund of tax difference, especially when the entire amount is refunded to the State by the Centre.
The Association also pointed out that the new provision to impose one per cent cess is a retrograde measure which goes against the ethics of VAT regime and, therefore, this provision may please be withdrawn.
The new proviso regarding sister concern is vague and unwarranted as sister concern transact business like any other genuine dealer.
Any fear of misrepresenting prices can be vouched as the prices are daily quoted in news papers and also at the Rubber Board site, he said.
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