The
Cochin Chamber of Commerce and Industry has urged the
Kerala Government to roll back its recent decision to
impose VAT on the maximum retail price (MRP) of packaged
goods, saying the decision would have "a series of
disturbing fallouts".
Addressing a press conference here, chamber president
Jose Dominic said that the proposal, contained in the
State Finance Bill for 2007, was against a Supreme Court
judgement, which had last year held that tax on the
first point of sale based on MRP was legally
unsustainable for any commodity.
The
supreme court had given this ruling while striking down
a Rajasthan government decision to impose VAT on MRP, Mr
Dominic said.
Stating that this measure would erode the benefits of a
modern, uniform tax system such as VAT, Mr Dominic said
"this will take us back to the stone age." The
state would end up losing as this would affects its
investment and business prospects, he added.
Claiming that the government decision did not make sound
economic sense for the state, Mr Dominic said trade
prices for most goods in Kerala would become higher as
compared to prices in neighbouring states and would
result in lower margins for the trade or alternatively,
a higher MRP for Kerala alone.
"In either case, this will open the floodgates for
illegal inter-state movement of goods, which will have
an adverse impact on the state's tax collections,"
he added.
Source :
Indlaw.com - New Delhi, India, dated 20/04/2007
