The Hindu Business Line : Experts flay timing of VAT launch in West Bengal

EVEN as the countdown for introduction of value-added tax system in West Bengal (from April 1) begins, a motley bunch of speakers (an HR consultant, a TV journalist and a professional manager) had veered round to the view that while in principle, it was good, the timing and the form in which VAT was being sought to pushed down the traders' throat was inappropriate.

Speaking at an interactive session on `Implementation of VAT and its utility for West Bengal', organised by the Commercial Taxes Bar Association, Behala, Mr S.M. Devadasam HR Consultant, said the timing of VAT was terribly wrong, especially when the States needed to be empowered in this era of de-centralisation.

Describing it as nothing but a knee-jerk reaction by the Centre to unearth the huge unaccounted wealth that was circulating around, he said it also had the potential to disturb the sizeable inter-State commerce within the country. Pointing out that the kind of reporting and documentation required under VAT could be a veritable nightmare for traders and the retail trade, he said the ascendance of a whole new set of bureaucrats such as commissioners and assistant commissioners under the new regime could pose a major threat to smooth functioning of the trade.

Calling for an altered VAT, he said the constitutional validity of such a move, taking away the power of the States to levy taxes on sales in its territory, should be examined. "It is violation of autonomy of the State."

Citing the practical difficulties that may crop up for the trade on account of VAT, Mr S.H. Venkatramani, Head, Corporate Communications, ITC Ltd, said the inflationary aspect of VAT has been fully affirmed internationally. Every country which introduced VAT, particularly Chile, Argentina and even Brazil in Latin America, had to face severe inflationary pressures on its economy, calling for separate price control policies, he pointed out.

According to Mr Snehasis Sur of Doordarshan Kendra, Kolkata, VAT, being introduced ostensibly to eliminate the unhealthy competition among States and also to bring a sales tax rate war, may be viewed as "either the glass is half empty or half full".

He said the existing sales tax system can also be seen as promoting a healthy competition among States. The States' autonomy to levy taxes, as guaranteed by the Constitution, cannot be disturbed without suitable amendments to the Constitution, he pointed out.

Earlier, in his inaugural speech, Mr Siddharta Shankar Ray, former Union Minister, Ambassador and Chief Minister of the State, said VAT was nothing new, and the idea floated during his time as CM in 1970 had to be abandoned owing to opposition from various quarters.

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