Jewellers protest tax raids in Kerala

July 16th, 2008 - 5:05 pm ICT by IANS  

Kozhikode, July 16 (IANS) Jewellers across Kerala did not open their shops Wednesday to protest against state-wide tax raids conducted by the sales tax authorities. The call for the protest was given by the All Kerala Gold and Silver Merchants’ Association.

The bullion merchants said that they were protesting against the “arbitrary raids and against the imposition of the compounding system” introduced under Value Added Tax (VAT) regime. Under the compounding system, merchants have to remit an advance tax of 150 percent of what they had paid in the previous year.

“Compounding is not compulsory. We are free to opt out of it. But the tax officials are using raids to compel us to accept the system,” said Ram Mohan Kammath, a district-level office-bearer of the association.

Tax officials Tuesday raided around 30 jewellers across the state. “We are not against raids. But the officials should also hear what the merchants say, before initiating punitive measures,” said P.C. Natesan, the state general secretary of the association.

The sale tax department officials, however, say that they are trying to impose the compounding system as retail sale of gold usually takes place without bills to evade the tax.

“Considering the amount of gold sold in the state, the government thinks that at present it is getting tax for only 10 percent of the sales,” said C.P. Sajeevan, assistant commissioner of sales tax here.

“We have not calculated the total evasion detected during the raid yesterday (Tuesday). The figure will be available in a week,” he said.

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