Financial Daily from THE HINDU group of publications
Tuesday, Jan 18, 2005
Financial Daily from THE HINDU group of publications Tuesday, Jan 18, 2005 |
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Industry & Economy
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Taxation `White paper lacks fundamentals' Our Bureau
New Delhi , Jan. 17 THE Confederation of All-India Traders (CAIT) said that the white paper on value-added tax released today lacked fundamentals of VAT.In a statement issued here, the apex body of the trading community said,"According to this first official document released by the Empowered Committee of State Finance Ministers on VAT, the prices of many commodities including those of daily use will certainly increase. "The flexibility given to States in certain matters will lead to disparities among various State VAT laws, which is against the basic fundamental of VAT." The CAIT Secretary-General, Mr Praveen Khandelwal, while reacting to the white paper, observed that an attempt has been made to establish that the proposed law shall prove to be beneficial in comparison to the existing Sales Tax Act but the contents of the paper reveal another story. It has been stated that the existing sales tax structure is fraught with double taxation and multiplicity of taxes but this statement seems to be factually incorrect since there is no provision for levy of turnover tax, surcharges on sales tax or additional surcharge under the present Sales Tax Act. Another fundamental of VAT that no other tax exists when VAT is introduced is also missing in the white paper. The continuation of other taxes along with VAT will result in multiplicity of taxes and will lead to price inflation, Mr Khandelwal said. Although it is said that CST will be phased out no clear-cut road map has been defined. The trade is demanding that CST be abolished with introduction of VAT itself. Regarding the composition scheme proposed in the white paper, Mr Khandewal said that it has no rationale since dealers opting for composition will not be eligible for taking advantage of VAT. CAIT also said that there was no need for another VAT audit as stated in the white paper.
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