The Tirupur Exporters Association (TEA) wants the Tamil Nadu Government to exempt the exporters from payment of input tax while implementing the Tamil Nadu Value Added Tax Act 2006, which comes into effect from January.
Expressing apprehension over the provision of the Section 18(2) of the TN VAT Act, 2006, which will compel the exporters to claim refund of input tax paid on items/goods that go into export production through a refund application filed with the tax department, the TEA President, Mr A. Sakthivel, said this provision would prove cumbersome for the exporters as this process may involve lot of paper work on both exporters and also the tax department leading to problems such as middlemen and inordinate delay in refund.
To overcome this, the association has suggested that the exporters can be given a specific declaration (like the form H under TNGST Act) to their input suppliers supplying raw material/packaging going into export production, and the suppliers in turn may raise the invoice without charging VAT, thereby, exempting the exporters from payment of tax.
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