Govt rolls back VAT on computers

Among edible items, the governmentnbsp;has decided to exemptnbsp;dates from VAT, perhaps in view of thenbsp;month of Ramzan, as it is a part of the meal of devoutnbsp;Muslims.nbsp;

8220;The government, following the representation from several organisation of trade and industry, reconsidered the tax rates on different goods and decided against the hike in VAT on computers and cellphones,8221; said Govindan Nair, Principal Secretary for Tax and Registration.

The rollback has, however, failed to pacify the traders because tax rates on more than 40 items remain unchanged.nbsp;Trader8217;s organisations have announced to launch a protest, demanding a complete rollback.

With the rollback,nbsp;the tax rate on computers, peripherals, LCD monitors and cellphones was restorednbsp;to the originalnbsp;four per cent. The tax rate onnbsp;other items remains unchanged. The new rates will be effective from October 1.

In a bid to make up fornbsp;the loss of revenuenbsp;due to the rollback, the government decided to hikenbsp;VAT on molasses from 4 to 12.5 per cent.

Following an objection raised by the Excise Department, the revised rate is going to be effectivenbsp;from April 1, 2009.

The department argued that anbsp;revision ofnbsp;tax rate on molasses in the middle of the yearnbsp;will lead to litigation from the distilleries.

On September 19, the Cabinetnbsp;had decided to hike the VAT onnbsp;computersnbsp;along with 44 other items from four per cent to 12.5 percent and entry tax was also imposed on seven categories of goods.

Among all the northern states, UP had imposed the highest rate of tax on these items. The necessary notification was, however, had not been issued.