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Our Bureau

New Delhi , July 28

STATES that have implemented value-added tax (VAT) are experiencing greater revenue buoyancy and greater tax compliance than under the sales tax regime, according to data collected by the Federation of Indian Chambers of Commerce and Industry (FICCI).

In Haryana, total revenue generation shot up by almost 28 per cent, according to the chamber. Delhi had the highest growth of 30 per cent in the first quarter. The average growth in revenue generation from VAT in the States that have made the tax operational is 12 per cent.

However, the chamber observed that India Inc has been bogged down by lack of uniformity in rules and procedures in States in respect to VAT. The adoption of different schemes for the set-off on capital goods and the unwillingness among some States to come on board have prevented the seamless movement of goods in a unified single market across the country.

To make all States fall in line towards implementing VAT, the chamber has called for bringing about an atmosphere of trust and confidence. It has suggested that tax departments clarify and demonstrate that VAT does not involve greater interference of taxpayers with tax officials and that there are reforms tilted towards an information-based system in which self-assessment is critical.

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