The Hindu Business Line : Hosiery traders seek tax refund scheme

CONFRONTED with the burden of paying higher rate of tax on inter-State sales, hosiery traders in Tamil Nadu have approached the State Government to form a tax refund scheme similar to the one being implemented by the West Bengal Government for the hosiery trade there as a way out to the additional tax burden caused by the amended Central sales tax (CST) Act.

The TN hosiery industry, represented by the Tirupur-based South India Hosiery Manufacturers Association (SIHMA), has written to the Tamil Nadu Government that the West Bengal Government's scheme reimburses nine per cent of the 10 per cent CST levied on hosiery sold on inter-State transaction, offering relief to the producers.

This refund applies to all registered SSI producers who cannot transact through the `C' form based inter-State sale (by non-ST registered trade).

SIHMA officials recently presented their case to the Tamil Nadu Finance Minister.

The apex body has argued that most of the small and tiny hosiery industries in the State who sell their hosiery goods to the road-side vendors and temporary shop-owners procuring their supplies in small lots do not have ST registration.

These traders who largely operate on seasonal basis are much affected by the 10 per cent levy under the amended CST and badly need this relief.

Following the CST amendment, the State's commercial tax department has begun to insist on `C' form based transaction for the inter-State sale of hosiery goods if the trade are to get one per cent CST.

The non-`C' form transaction will automatically come under the 10 per cent CST rate.

The officials also said that the Tamil Nadu Government could calculate the 10 per cent CST on the turnover of the trader every month at the time of filing the monthly returns and offer the refund.

This way, the workload on the Sales Tax department in CST collection from the hosiery trade would be reduced.

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