Financial Daily from THE HINDU group of publications
Saturday, Sep 17, 2005
Financial Daily from THE HINDU group of publications Saturday, Sep 17, 2005 |
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Industry & Economy
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Taxation Time not ripe for single rate VAT: Panel Our Bureau
New Delhi , Sept. 16 THE VAT Panel is of the view that time is not yet ripe for implementation of a single rate State-level Value Added Tax (VAT). "It (implementation of single rate VAT) will take time. One must welcome any such move. But this would have to wait till the current system gets stabilised and all shortcomings are sorted out," Mr Ramesh Chandra, Member Secretary of VAT Panel, said at a meeting organised by the Confederation of All India Traders (CAIT) here on Friday. The meeting was organised to debate the introduction of single rate State-level VAT. Admitting that single rate may be beneficial in many respects, Mr Chandra, however, pointed out that the traders' community were not making any demands for a single rate in the sales tax regime. The Delhi Government's VAT Commissioner, Mr R.K. Verma, said that the benefits of a single rate State-level VAT outweigh the negatives. He highlighted that a single rate would help simplify VAT return, ensure that there are no classification disputes and remove scope for tax arbitrage. Mr Verma said that it would be difficult to convince States that have high revenue neutral rates (RNR) to go in for a single rate VAT. "It would be easy to convince them if their RNR are brought down," he said. Mr Verma felt that States would do well to restrict their fiscal sovereignty for common good and pursue the path of a single VAT rate. Meanwhile, Mr Ramesh Chandra, told presspersons on the sidelines of the meeting that Uttaranchal will delink from Uttar Pradesh, and go ahead with the implementation of State-level VAT. Uttaranchal was the lone Congress-ruled State that had so far not implemented State-level VAT. Indications are that the State-level VAT would be introduced in Uttaranchal from October 1. Hitherto, Uttaranchal had been pointing out that it could not implement VAT so long as its neighbour — Uttar Pradesh did not adopt the new tax system.
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