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CII seeks withdrawal of VAT on MRP by Kerala Govt

Apr '07
The Confederation of Indian Industry has written to Dr Asim Dasgupta, Convenor and Mr. Satish Chandra, Member Secretary of the Empowered Committee of State Finance Ministers on VAT seeking intervention of the Empowered Committee to persuade the Government of Kerala to withdraw the proposed amendment of the Kerala VAT Act which provides for imposition of VAT on MRP.

The Circular by Kerala Government dated 30th March 2007 introduces a provision in Kerala VAT Act, 2003 provides for payment of a first point tax calculated on MRP printed on the packaged commodities covered by the Standards of Weights and Measures (Packaged Commodities) Rules, 1977.

Terming this proposed Amendment as 'going against the spirit of VAT', CII said that this does away with the concept of collecting tax at each point in the value chain, based on the value added at each point. CII added that it threatens to cause undue hardship to both industry and trade, apart from violating the basic principles of a Value Added Tax.

In its letters to the Member Secretary and Convenor of the Empowered Committee of State Finance Ministers on VAT, CII has raised 7 issues Click here to read more:

Earlier, a delegation of FMCG members of CII in Kerala met the Finance Minister of Kerala Dr Thomas Isac. The delegation was led by Mr P Ganesh, Chairman, CII Thiruvananthapuram Zonal Council.

The minister responded by asking CII to organize a meeting of distributors and dealers to understand the matter better and has promised to study the impact of the tax on MRP on manufacturers and dealers.

Confederation of Indian Industry

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