KETA/40402/2007-2008                                        17th January, 2008

Dr. T.M. Thomas Issac,
Hon. Finance Minister of Kerala,
North Block, Secretariat,
THIRUVANANTHAPURAM.

Respected Sir,

Sub :  2008-2009 Pre-Budget Discussion
         
           ------------------------------------------

We thank you very much for inviting us for Pre-Budget discussion.  We feel highly honoured and give our suggestions for your kind consideration and favourable disposal:

1.      E-filing

The limit for E-filing should be raised to Rs. 50/- lakhs and simplified.  It should be based on Vat Schedules and not on commodity code.  The Notice served earlier for non filing of e-returns should be nullified as per the assurance given verbally.

In the present E-filing system , details of other information, except sales & purchase,  can only be given  online, the tax payers have to keep the telephone line busy for a long time for this purpose or he will have to opt for Broad Band connection.  In both the cases the expenses will be  high in addition to inconvenience caused.  To avoid these problems the eligible e-filing traders should be provided with software in CD form, where all the details are provided and finally uploaded to the main server.

2).   Trade discount, Target discount and Sales man incentive:

Trade discount, Target discount and Salesman incentive given by the principles or the manufacturer or the wholesaler, for achieving the sales targets or for increasing the sales or to promote the brand etc ,  received annually is disallowed and collecting the input tax on the relevant period is highly condemnable. As these incentives are in no way reducing the output tax collected, instead Govt is getting more revenue

When the tax authority disallows the credit note on this discount and insists to pay the input tax pertaining to the month, and if the suppliers allow the same discount at the bill itself the impact on the vat collection is as follows:

The Dealer B is sure of his margin 3%, even reaches or not the target.  Also allowed  50% of his discount to his sub Dealer.

NET LOSS TO THE GOVT IN THIS TRANSACTION COMPARED TO THE PREVIOUS ONE IS RS. 956 /- .

3).  Validity of Credit note and Sales  Returns:

Credit note and sales returns should be allowed upto 1 year

4).  Vat Act 2007 – Rules and Forms:

Vat act 2007 - Rules & forms are yet to be published.  Eg. As the supply to railway at concessional rate is affected due to delay in publishing the prescribed forms.

5).  Electronic ID card:

In spite of repeated representations and requests  at various occasions the amount of Rs.500/- collected in 2006 for the supply of ID card had not been returned back.  It  should be returned  with interest.

6). CIRCULAR no 28/07 DT 21-4-2007 – “C” form:

Revalidating “C” form once in 6 months should be withdrawn. As it is a very difficult task to re-validate the details of availability of statutory forms with dealers are intimating thru monthly returns, in this case why such revalidation is required. This is very difficult for the small dealers who hardly purchases from interstate.

Whereas  Maharastra, AP and many other states of  North India have introduced on line booking of statutory forms like C & F etc, and the forms will reach the  door steps of the Dealer by courier in a day or two.

Our commercial tax department should also implement this system and the circular 28/07 should be withdrawn.

7). Acknowledgment in form 10K:

Even though  acknowledgement in form 10K had been   promised by CM and FM at various  Meetings, it is not implemented so far.
 
8). TIN Dealers:

Like PIN dealers the TIN dealers also having less than Rs.40 lakhs turnover should be allowed to pay tax monthly with covering letter and the returns once in three months

This will help not to pile up of returns at the office, the returns is reduced to 4 nos. instead of 12 it will be easy for the officers to scrutinize the returns.  (Ref U.T OF JHARKAND)

9)   Discrimination in tax rates:
The wet grinders are charged at 4% in Tamil Nadu but here it is charged at 12.5%.These type of threat is faced by the bordering state dealers.

10.  Stock Variation:
Stock variation upto 5% should be allowed due to pilferation, damage etc. as allowed to FCI, Supplyco etc.

11.  Revised Returns:
      Filing of revised return, rectifying the mistake or omission should be increased from two months to within the financial year or before the audit report.

12.  Monthly return:

Under Section 20(1)
The rejected monthly returns in any case should be informed in writing within 15 days  as prescribed in the rule should be implemented.  In most of the cases it takes a month’s time for such intimation.  Notices are not served to the dealers immediately.  Some of the dealers were asked to come to CTO office to collect it.  Most of the notices are pertaining to returns and if not served in time the consequences are to be bourn by the dealers.  Hence the notice should be served at the dealers place within   two or three days from the day it is prepared.
Failure which if any defect is noticed after the return period, the liability of paying any interest on the defective period is from the date the defect is noticed and should not be from the return period.

13.  Sales Bill:
Latest format of Sales Bill in form 8 should be simplified further by removing column 2, 3 and 4 as it is finding difficult to print in the computer forms.

We trust your goodself would kindly consider the above points favourably.  Expecting a positive result, we remain.

Thanking you,
Yours faithfully,
For THE KERALA ELECTRIC TRADES ASSOCIATION

    Sd/-

E.V. GEORGE
    Secretary

C.C. to Commissioner of Commercial Taxes,
             Thiruvananthapuram