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à
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IN ONE THE MOST LARGE
SCALE REFORMS OF THE
COUNTRY¶S PUBLIC
FINANCES IN OVER PAST 50
YEARS, INDIA HAS FINALLY
AGREED THE LAUNCH OF ITS
MUCH DELAYED
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ST
FROM 1 APRIL, 2005
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Necessity of Value Added Tax
The General perception of the existing
single point sales tax system is that it is
highly complex with multiplicity of rates,
plethora of explanation, many rates in
some group of item, extensive use of
statutory forms, high and unrealistic quota
of assessment, loss of revenue on value
additions, tax rate war between States,
etc.
The consensus was that a new
system is needed and Value
Added Tax has emerged as a
principal instrument of taxing
domestic consumption world
wide during last four decades.
The basic advantages of Value
Added Tax can be stated as its
neutrality, transparency,
certainty and self policing
mechanism.
It is now in operation in more
than 100 Countries.
HAT IS VAT
Value Added Tax is a multi point sales tax
with set off for tax paid on purchases.
It is basically a tax on the value addition
on the product.
The burden of tax is ultimately born by the
consumer of goods.
In many aspects it is equivalent to last
point sates tax.
It can also be called as a multi point sales
tax levied as a proportion of Valued
Added.
IT IS A STATE VAT
The discussion regarding the VAT and the
implementation which is being planned is only confined
to the State.
There is no proposed Central VAT at present in the time
frame of 1.4.2003.
All the States are drafting their separate Value Added
Tax Act and as per the present position.
every States will have a separate VAT Act with different
provision not corresponding with each other.
It can be stated that the proposed VAT Act is the primary
stage of VAT.
It is proposed that there would be Two tax rate slabs on
which tax would be levied.
The first one would be 4% and would
covered all essential items. The second
one is 10% and all luxury items would
be covered.
Jagdish Shettigar
» BJP Member
POLITICAL PARTIES
ONLY IF THE TRADERS AGREE
J. JAYALALITA
PRESIDENT
AIADMK
THE COUNTRY LIKE AMERICA
HICH HAS SIMILAR FEDERAL AND
STATE LAS/CONSTITUTION HAS
NOT IMPLEMENTED VAT.