Using RTI for taking up Taxation issues
The Commercial Taxes Department of Tamil Nadu has detained several consignments of generating sets. The department claims that generating sets attract a higher rate of value-added tax (VAT). The immediate impact of such action, as put by the representatives of the Indian Generators Manufacturers’ Association, is that customers have started purchasing generator sets from manufacturers in the neighbouring States to benefit from a lower rate of VAT.
Sale of generators and generating sets attract 5% tax in Karnataka, Kerala and Andhra Pradesh. On the other hand, Tamil Nadu Commercial Taxes Department officials, while detaining consignments, insisted that they attract a levy of 14.5 %.
As per Association representatives, the tax on generators was from 12.5 per cent to 4 per cent in 2008. In 2011, this was increased to 5 per cent and the tax on items that attracted a levy of 12.5 per cent was increased to 14.5 per cent. The consignments have been detained claiming that 5% VAT is applicable only for generators and not for generating sets though technically generating sets are generators for producing electricity.
The association is waiting for the reply to the Right to information (RTI) appeal that it has filed seeking clarification.