The Hindu Business Line : `VAT will lower tax burden on business'

AS the value-added tax regime unfolded on Friday in a majority of the States, West Bengal's Finance Minister & Chairman of the Empowered Committee on VAT, Dr Asim Dasgupta, described VAT as the "most important tax reform since Independence" and said it was an improvement on the existing taxation system.

Dr Dasgupta told newspersons here that 18 States had already passed legislation on VAT. Three more States — Himachal Pradesh, Assam and Meghalaya — had passed the law but the notification in this regard was yet to be issued. He expressed hope that other States would follow suit.

Stating that the sales tax regime required businessmen to pay input as well as output tax, he said the VAT would lower the tax burden on the business community. Besides, harassment by sales tax authorities would be a thing of the past. He hoped that the introduction of VAT would facilitate greater tax compliance.

According to Dr Dasgupta, with the introduction of VAT, in West Bengal, the tax on rice and wheat would go down to zero per cent from 2 per cent, tea and medicines from 8 per cent to 4 per cent, cement from 20.25 per cent to 12.5 per cent, cars from 13.8 per cent to 12.5 per cent and cooking gas from 17 per cent to 12.5 per cent. However, VAT on some items such as AC components and batteries would go up from 10 per cent to 12.5 per cent.

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