The Hindu Business Line : Invoke Article 307 to facilitate authority for VAT: Assocham

THE Associated Chambers of Commerce and Industry of India (Assocham) has suggested invocation of Article 307 of the Constitution for setting up of an independent constitutional authority for enforcing the concept of `common market' and facilitate introduction of VAT.

In a memorandum, the Assocham President, Mr Mahendra K. Sanghi has urged the Government that for the overall reform of taxes on intra-state trade and to have a common market, States should not levy taxes that create hindrances for adversely affecting the free flow of goods across States.

Therefore, the invocation of Article 307 has become necessary for creating a constitutional body that restricts the State Governments to unnecessary levy certain taxes that may come on the way of implementation of VAT.

The major issues before the proposed authority should be on integrating other State taxes into State VAT, as that will involve combining all the taxes on commodity and the services.

Mr Sanghi further pointed out that the State Governments also levy taxes which include excise on alcoholic liquor for human consumption, opium, Indian hemp and other narcotic drugs and taxes on the entry of goods into local areas for consumption, use or sale therein (octroi levied and collected by local authorities through delegated power).

He has also suggested immediate constitution of VAT Council of States and structure it in a fashion in which the Finance Ministers of the States are made its members.

Mr Sanghi regretted that the VAT Council of States which has been notified as early as 2000 has yet to be structured, while the talk of the town is that all the States will implement the VAT by April 2005.

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