90% traders can opt out of VAT

NEW DELHI: The decision of the empowered committee on VAT to raise the turnover limit for traders to opt out of VAT from Rs 25 lakh to Rs 40 lakh would enable 90% of the traders to opt out of VAT.
However the new limit would cover over 80% of the wholesale dealers and those who deal in tyres, cement, consumer durables, metals, chemicals and paper.
Majority of dealers in metal, paper, furniture and chemicals act as wholesalers and stockists to sub-dealers and small dealers. The new exemption will at most affect the latter.
The new limit would cover majority of dealers and shopkeepers in major markets like Connaught Place, South Extension, Kamla Nagar, Karol Bagh and Chandani Chowk.
Sources in the local trading community, however, say that the new limit will take some sting out of the anti-VAT lobby.
They say though the VAT is being opposed in the name of small traders and shopkeepers, the people leading anti-VAT agitation are the ‘fat cats’ in the retail and wholesale trade. However a tyre dealer says, “All the office bearers in various trade associations like the New Delhi Traders Association and the Chandani Chowk Traders Association are big showroom owners with annual turnover running into crores.�
A tyre company CEO says, “Small dealers have nothing to loose. They are open to becoming a sub-dealer or retailer. Opposition is comes from large dealers who perceive VAT as a tax on their profits.�