The Hindu Business Line : VAT implementation

With two weeks to the deadline for VAT implementation, it is troubling that 12 States, including Uttar Pradesh, Tamil Nadu, Madhya Pradesh and Chattisgarh, are yet to pass the legislation.

VAT is a threat to those who do not account for all transactions. Conservative estimates put tax evasion on sales tax alone at Rs 20,000 crore. The bugbears in the implementation VAT are:

Lack of uniformity in legislation, even in those States that have opted to introduce it.

Range of 4 per cent to 12.5 per cent, which makes the refund provision on inputsless attractive than evasion of accounting sales.

Emphasis on paper-based documentation.

VAT is a dire need for fiscal reform, and its implementation will require our leaders to rise above politics.

N. Narasimhan

Bangalore

Letters to the editor and contributions can be sent by e-mail to: bleditor@thehindu.co.in

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