Financial Daily from THE HINDU group of publications
Saturday, Jan 11, 2003
Financial Daily from THE HINDU group of publications Saturday, Jan 11, 2003 |
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Industry & Economy
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Taxation Simultaneous VAT, entry tax opposed Our Bureau
KOLKATA, Jan. 10 THE President of Bharat Chamber of Commerce, Mr N.R.Goenka, has urged the Union Finance Minister, Mr Jaswant Singh, to reconsider the decision of the Government to allow State Governments to levy entry tax simultaneously with the VAT system. In a statement here, he said this would lead to creation of tariff barriers within the country. Expressing serious concern over the Centre's decision to give in to the States' demand for levying entry tax, Mr Goenka said on Tuesday that the decision ran counter to the avowed policy of integration of the tax system in States. The entry tax payable by a dealer for goods brought into the local area in the State was not compatible with the concept of Value Added Tax, he pointed out. He said, "the imposition of any entry tax defies the concept of free trade, which forms the basic premise for implementing a pan-India VAT.'' While the whole world was moving towards globalisation and forming larger trade zones, entry tax will divide the States into smaller trade zones, he added. According to the chamber, for a smooth transition to VAT system, all State levies such as luxury tax, octroi, entry tax, mandi tax etc need to be abolished, and there should be a single tax which is VAT-able. The Kelkar Task Force on Indirect Taxes has recommended the abolition of all other taxes by States, following the transition to VAT. Mr Goenka said without insisting on tax integration, the Centre was encouraging the State Governments to adopt multiple levy, which will lead to complexities and extra hardships for industry and trade.
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