Kerala opposes VAT cut by other States

The State Government has protested against the practice of certain state governments for fixing the VAT rates below the benchmark level, Mr T. Thomas Issac, State Finance Minister, has said. He pointed out that Union Territory like Puducherry has fixed tax rates below the agreeable level.

This is against the basic principles of VAT and the Government has raised the issue before the Tax Empowered Committee in this regard, he said. VAT is meant for abolishing tax competition among States. As the tax rates are lower in UT, there is every possibility for tax evasion. To face the competition from lotteries from other States, the Government has also taken steps to re-launch State Lotteries from next month by enhancing number of prices as well increasing the commission of agents.

A welfare scheme for lottery agents will also be introduced and the Government will contribute one per cent of total collection to the welfare fund, he said.