The Tamil Nadu government is all set to introduce the Value Added Tax (VAT) regime in the state from 2007.
Presenting the maiden budget of the DMK government in the state Assembly, state Finance Minister K Anbazhagan said that "the government has decided to introduce VAT in the state with effect from January 1, 2007".
"Representations received from large number of trade organisations, industries, especially pharmaceutical industry, and exporters in the state regarding reduction in the rate of tax will be accommodated to a great extend by the introduction of VAT," he said.
The budget, which did not contain any fresh tax proposal, leaves a fiscal deficit of Rs 7,231 crore.
The deficit would be covered by "economy in expenditure and better tax administration," Anbazhagan said.