Chambers join hands to oppose amendment in Gujarat VAT Act

AHMEDABAD: All the regional chambers of commerce in Gujarat today joined hands to oppose the amendment in Gujarat Value Added Tax (VAT) Act 2013, as the state traders feel it was posing transactional problems, an official of Gujarat Chamber of Commerce & Industry ( GCCI) said today.

"A meeting of all regional chambers was held today to discuss the problems arising out of newly-inserted sub-section 7A to Section 11 of VAT," GCCI Secretary general Hasmukh Hingu said in a statement.

GCCI President Prakash Bhagwati and its VAT Committee Chairman Nayan Sheth explained the problems arising out of the newly added sub-section 7 A to Section 11 of VAT Act.

The tax amendment was done by the state government in budget 2013-14 and notified recently, after the assent of the Gujarat Governor. It came into effect from April 1, 2013.

The notification says that if a vendor has not paid tax collected on sales to the government treasury, the buyers' 'input tax credit' will be disallowed to that extent.

It has led to a situation whereby if any registered dealer or trader for any reason forgets to deposit the tax collected by him in the government, then the urchaser will not get the input tax credit to that extent, a GCCI statement said.

The government will directly collect tax from the purchaser and also wrong input tax credit taken by purchaser will attract penalty of 150 per cent. Besides, interest would be levied on that, it stated.

Meanwhile, during the meeting it was decided to represent the case before the Gujarat Chief Minister Narendra Modi.

"It was decided during the meeting to represent the case to Gujarat Chief Minister and if no steps are taken by the government then legal action would be taken to protect genuine traders in Gujarat," a GCCI statement said.