Skipping Vat may cost Tamil Nadu firms dearly
That one step by the Tamil Nadu government—to skip implementing the Value Added Tax (Vat)—may cost its industry crores of rupees every year. And if this is not rectified, firms in the state may have no option but to look for alternate sites. This is the impression one gets from the response of a cross section of industrialists and associations about cost of doing business in Tamil Nadu.
The state has a sound industrial base and its manufacturing sector is upbeat about capacity expansion. It continues to attract substantial fresh investments and is considered a hot destination by both foreign and domestic players. However, “the state government’s decision to not implement Vat will have an adverse impact. Since it is a manufacturing hub for a number of products, for firms based in Tamil Nadu, the cost of doing business outside the state may rise. This will affect our competitiveness in the long run”, says a leading industrialist who does not want to be quoted.
A senior official from Sundram Fasteners Ltd agrees the cost of business in Tamil Nadu might increase because of the lack of introduction of Vat. “The state has not introduced Vat, because of which we may not be as competitive as other states. However, we do not see any problem with the governance. Of course there are delays in getting sanctions, but we are willing to accept delays. As for infrastructure, Tamil Nadu has one of the best infrastructure base in the country,” says he.
More: financialexpress.com