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For a better understanding of VAT let us first see the existing tax regime.
At present in India we have several kinds of direct and indirect taxes such
as:
1. Sales tax – It is an indirect tax. It is to be paid when a product or
commodity is sold. It forms the mainstay of states tax revenue. It is
levied to not only consumer goods but also on raw materials and
capital goods. It generates about two-third of the revenue from
states.
2. Octroi – It is an indirect tax. It is am important source of revenue
for local bodies, is a tax on the entry of goods into local areas from
other areas for the purpose of consumption or sale. Industries and
trade circles criticize the continuation of Octroi and have termed it
1
as a retarding factor in the growth of business and commerce in the
country.
3. Additional sales tax
4. Surcharge tax
5. Turnover tax
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collection, while the Central Government prescribes the ceiling rate on
sales tax on goods in inter-State trade. The Central Government also
levies additional excise duties on textiles, sugar and tobacco in lieu of the
sales tax with the proceeds being distributed across the States. In most of
the cases, sales taxes are levied on commodities which are also subject to
Central excise duties. Mostly sales taxes on inputs are not rebated and
therefore tend to lead to reverse flow of resources to richer States when
they sell the goods to the poor States as the cumulative impact of the
cascading effect is passed on. Typically, the varied inter- State sales tax
system on certain occasions have led to unhealthy ‘rate war’ in terms of
competitive reductions in sales tax rates to attract trade and industry
thereby leading to sub-optimal allocation of resources. Sales taxes
discourage horizontal integration and encourage vertical integration which
harms the growth of small scale ancillary units. Although State laws
provide relief through exemptions in regards to sales tax when inputs are
sold to manufacturers, such concessions are limited and lack uniformity.
This lacuna has hindered indirect tax reform system in India and
represents a classic case for a switch over to VAT independently by the
Central Government and the State Governments.
Let’s have a glance at a hypothetical scenario where you intend
selling product X made in Tamil Nadu and Uttar Pradesh. For doing this,
one would have to buy the product in Tamil Nadu and pay a Central Sales
Tax (CST) to the state of TN. CST is the tax to be paid to the state in
which the goods are manufactured but sold in some other state. Next will
be the shipping of the product in which the goods are to be sold, UP in
this case, which is more than 2000 km away. On reaching the state of UP,
you need to pay something called as Entry Tax for taking the product
inside the state. This in turn will be followed by the local Sales Tax of UP.
In addition there is Octroi to be paid to the Municipal Authorities of UP.
Moreover, if the product in question attracts luxury taxes, the number of
taxes applicable goes up even further. This complicated form of taxation
is often a major deterrent to inter state commerce.
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W H Y - A - N E W - T A X - S Y S T E M?
Third: It creates a poor economic impact. The current tax code is often
altered to provide economic stimulus for various business segments, with
dubious results. It neglects the overall health of the economy. It often
discourages economic growth by creating a negative incentive to work
and to earn more. An ideal system would tax spending to create a
positive incentive to earn more, and save and invest more.
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educated and talented people could contribute greatly in productive jobs
in the private sector.
Seventh: It is inefficient. It just costs too much to collect taxes this way.
If we are ever going to reduce the national deficit without breaking the
back of the tax payer, this is the first place to reduce waste.
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conveniently close their eyes on stray cyber sales, but if they reach more
than 50% of their total retail sales, taxman can no longer ignore his
income loss. If it becomes too hard to collect taxes, the Government will
be compelled to curtail welfare expenditure, which would be politically
unwise.
One of the key areas where we can achieve dot of improvement in
the immediate future is definitely the tax system. In the near future, it is
going to be difficult to identify a tax payer. So collection of tax is going to
pose a problem. VAT is the answer of the solution.
History
Finally after 14 yrs vat is going to be implemented. Let us have a
glance on the history of vat up till April 2005 and reasons why it could not
be implemented before. Economic reforms were on a priority by the
government since 1991. But it is to be noted that, VAT was introduced
in India in the year 1976, in respect of Central Excise. However, it
was restricted only up to the Excise Duties, and was known as Modvat
(modified value added tax). The coverage of Modvat gradually increased
and covered various other chapters. The importance & need of VAT in
the sales tax structure of India was recognized by the taxation
authorities. But the reason why the proposal of VAT took a long time
is because VAT in its simplest form cannot be adopted in India where
there are various authorities who can levy the taxes (e.g.: State/
Central/ Municipality) There are various reasons why the
implementation can take time. It is the policies, the framework, the
commodities, the taxation rate, changing from a multiple point tax to
a single point tax, etc and all such details have to be worked upon.
Moreover, in the present sales tax regime, it is the states that
collect the taxes, that too at different rates.
Dr. Manmohan Singh, the then Union Finance Minister, in his Budget
speech for the year 1994-95 introduced the new concept of Service Tax
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and stated that '' There is no sound reason for exempting services from
taxation, therefore, I propose to make a modest effort in this direction by
imposing a tax on services of telephones, non-life insurance and stock
brokers.''
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What will be covered by VAT?
All business transactions carried on within a State by individuals,
partnerships, companies etc. will be covered by VAT. More than 550
items would be covered under the new VAT regime of which 46 natural
and unprocessed local products would be exempt from VAT, a PTI report
quoted West Bengal Finance Minister and VAT panel chairman Asim
Dasgupta as saying. About 270 items including drugs and medicines, all
agricultural and industrial inputs, capital goods and declared goods would
attract 4 % VAT. The remaining items would attract 12.5 % VAT. Precious
metals like gold and bullion would be taxed at 1 %. Considering the
difficulties faced by the tea industry, it was decided that tea-producing
states would be given an option to levy 12.5 % or four % subject to
review in 2006. Petrol and diesel would be kept out of VAT regime, which
covers only marketable items; Dasgupta was quoted as saying that the
panel was yet to take a view on CNG. Following opposition from some of
the states, it was decided that states would have option to either levy four
% or totally exempt food grains but it would be reviewed after one year.
Three items – sugar, textile and tobacco – covered under
Additional Excise Duties, will not be under VAT regime for one year but
the existing arrangement would continue.
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A slab showing various rates for different
commodities under VAT
1% Gold
Silver
Precious and semi-precious stones
4% Basic necessities
Industrial and agricultural inputs
Declared goods
Medicines and drugs
AED items
Capital goods
Composition scheme
Small retailers may not be in a position to maintain detail record of
tax paid on inputs and tax payable on final products. In such case, they
will pay tax at flat rate based on their turnover. Naturally, they cannot
issue a VAT invoice and cannot show sales tax separately in their invoice.
The empowered committee has agreed that dealers with turnover up to
Rs. 40 lakhs p.a. will be entitled to the composition scheme, by just
paying 1 % of their turnover as composition tax. Dealer with turnover
below Rs 5 lakhs p.a. are to be completely exempt from VAT.
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The basic principle of VAT
The Value Added Tax system has its origin in the West European
countries. Generally, taxes are levied on the selling price of the product.
Today raw material passes through a number of stages and processes
until it reaches the ultimate stage. For instance, steel ingots are made in
a steel mill, which are then rolled into plates in a re rolling unit and after
this a third manufacturer will make furniture from these plates. Thus,
output of the first manufacturer becomes the input of the second
manufacturer, who carries out further processing and supplies it to the
third manufacturer. This process continues till the final product emerges.
The product then goes to the wholesaler who in turn will sell it to the
retailer and he will finally turn it to the consumer. Thus, if tax is levied on
the selling price of a product, the incidence of tax goes on increasing as
the raw material and final product pass from one stage to another, as
shown in the table below
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All legal and natural persons who provide goods, works or services
and have an annual sales turnover exceeding the threshold limit should
register as taxpayer. All importers are required to register irrespective of
their annual turnover. If the dealer supplies only exempt goods and
services he must still notify the local VAT office if his turnover exceeds the
threshold limit. Totally exempt businesses will not however be registered
as taxpayers but still be subjected to later visits by VAT officials to
confirm their exempt status.
It is the person, NOT the enterprise, who is registered for VAT. The
person is only registered once for all enterprises/branches/divisions
carried on unless permission is granted to register them separately.
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Credit for purchases can only be claimed if you are in possession of an
official tax invoice which shows the amount of VAT you have paid on the
transaction. If you calculate that you owe tax to the VAT office it should
be paid at the same time as you submit your declaration form. If you are
owed tax it will be carried forward and you will deduct it from the tax you
owe the following month. You will also need to show other information on
your declaration.
All dealers with an annual turnover of more than the threshold limit
shall register for VAT. All dealers registered under VAT should pay.
Dealers with turnover less than the threshold limit may register
voluntarily.
VAT will be paid along with monthly returns. Credit will be given within the same
month for entire VAT paid within the state on purchase of inputs and goods. Credit thus
accumulated over any month will be utilized to deduct from the tax collected by the dealer
during that month. If the tax credit exceeds the tax collected during a month on sale within
the state, the excess credit will be carried forward to the next month.
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Comparison of VAT and Existing tax
Tax levied at the stage of the first sale Tax levied and collected at every point
(only for cotton, leather and natural of sale. Tax levied and collected at
gas at the final stage). every point of sale.
Tax collected at every point of sale and
Successive sales (resale) of goods on the tax already paid by the dealer at the
which tax is already paid do not time of purchase of goods will be
attract tax. deducted from the amount of tax paid
at the next sale.
Dealers reselling tax-paid goods will
Dealers reselling goods on which tax
have to collect VAT and file returns
has already been paid do not collect
and pay VAT at every stage of sale
any tax on resale and file nil returns.
(value addition).
The manufacturer will pay VAT on the
On 19 goods used as raw materials goods purchased as raw materials but
there is no input tax credit on the tax the VAT paid on raw materials will be
paid on such goods and 2% tax is deducted on the sale of goods
levied on other goods used as raw manufactured. Thus duplication of tax
materials for manufacture. burden on raw materials will be
avoided.
Computation of tax liability is
It is transparent and easier.
complex.
Sales Tax is not levied at the time of VAT dispenses with such forms and
purchases against statutory forms but sets off all tax paid at the time of
there is misuse of such forms purchase from the amount of tax
resulting in tax evasion. payable on sale.
Returns and chalans are filed The return and the chalans will be filed
separately and in returns the dealers together in a simple format after self-
have to give numerous details. assessment done by the dealer himself
Scrutiny of returns is also difficult. which will be subject to scrutiny.
Huge number of forms required in
At the most a few forms required.
procedure.
Only two rates.
Six taxation rates.
Tax only on goods. Tax on goods and services both.
Assessment done by the department. Self-assessments by dealers.
Penal provisions for defaulters and
Penalties will be stricter.
evaders of tax not very strict.
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An Interview by Mr. HARSHWARDHAN GAJBHIYE
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VAT. Even the committee of VAT headed by the Finance Minister of West
Bengal is very trustful and a very good and knowledgeable committee.
With the VAT-ification of India from April, here’s a look at how other
economies have been there, done that. Compared to EU’s maximum rate
of 25%, the two rates that cover the highest no. of items in India already
announced stand at 4% and 12.5%. Within Europe, the standard rates for
countries vary quite a bit. On the higher end of the scale are countries
like Denmark, Hungary and Sweden, where the rate is 25%. France has a
rate of 19.6%, Germany has 16% and Italy is pegged at 20%.
Netherlands and Portugal are also on the higher side at 19%. As far the
UK is concerned, the standard rate is at 17.
In several countries the rates are lower. In the absence of a
minimum rate requirement the figure in some cases has dropped below
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the double-digit mark- Singapore, with the standard rate of 5% and
Canada, for instance. Australia isn’t far behind at 10%. Switzerland has
rate of 7.6%. In China, though the figure is on the higher side at 17%.
While the US doesn’t have VAT, most states and cities levy sales tax, with
rates varying from 4% to 7%. South Africa at 14% and Sri Lanka at 15%
also have a VAT system in place.
Rate Rate
Country (%) Country (%)
India 4/12.5 Spain 16.00
Singapore 5.00 China 17.00
Canada 7.00 UK 17.50
Switzerland 7.60 Greece 18.00
Czech
Australia 10.00 Republic 19.00
New
Zealand 12.50 Netherlands 19.00
South
Africa 14.00 Portugal 19.00
Mexico 15.00 France 19.60
Sri Lanka 15.00 Austria 20.00
Germany 16.00 Bulgaria 20.00
Italy 20.00 Belgium 21.00
Ireland 21.00 Finland 22.00
Poland 22.00 Norway 24.00
Denmark 25.00 Hungry 25.00
Sweden 25.00 Argentina 21.00
Indo-China comparison
In 1990, value of our exports was $18bn & Chinese exports for
the same period was $62.1bn. In 2000, we improved it to $43bn but
china reached the astounding figure of $249bn. Similarly, our FDI was
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$o.2bn in 1990, which increased to $2.3bn by 2000. During the same
period china raised FDI from $3.5bn to $38.4bn. Our share of important
commodities in European Economic Community (ECC) imports went down
from 0.8% to 0.7% during 1990-2000 but china has improved the same
from 3.4% to 9.2%. In the North American imports, also, our share was
stagnating at 1% during the last decade, whereas china improved from
11.8% to 25.3%.
No Debt Traps
In recent times public finance reforms have become the main
concern of Governments all over the world. President Reagan introduced
certain unprecedented fiscal reforms in the 80's. They were followed by
many changes in the monetary policies to reduce fiscal deficit. But
developing countries instead of reforming tax system, took the easy route
of market borrowing from external and internal sources. The result was
uncontrollable inflation and all pervasive poverty. Serious law and order
problems ensued with violent protests against Governments' policies for
inflation.
Many countries in Africa and Latin America are still in deep debt
traps for want of suitable mechanism to reduce fiscal deficits. Taxpayers
in developing countries invariably resent imposition of personal income
taxes. They try to avoid payment at any cost and only salaried employees
get caught in the tax net. Most of the countries in the world have now
switched over to VAT for collecting taxes unobtrusively through an elastic
and transparent system. VAT has been universally acclaimed as the
panacea for correcting the fiscal imbalances as it works well within all
political and legal constraints.
One important lesson from the tax reform experiences of developing
countries is that for a successful outcome in terms of revenue and other
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objectives it should apply to the entire economy. A partial replacement of
a few components of federal taxes with modern VAT may not achieve the
objective of tax reform. From the experiences of VAT operating countries,
it is seen that the revenue and the tax ratio to GDP increased
considerably after switch over from conventional taxes. We have seen the
deficiencies of the Indian indirect tax system. They -show the urgent need
for comprehensive reforms to avert the impending collapse of the
economy in about ten years time. We cannot attribute the low GDP
growth rate entirely to the defective tax system but a thorough overhaul
of the fiscal policies would definitely go a long way in rejuvenating
investment and growth.
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There is no other tax that can be as transparent and simple like
VAT. At every stage of transaction, VAT indicates the quantum of tax
payable after adjusting tax credits. The taxpayer, the ultimate consumer
and the administration are all fully aware of all the details of tax payment.
In the conventional system, only the taxpayer and administration know
the tax liability. If there is a nexus between the department and the
payer, it is possible to distort the element of tax without the knowledge of
the ultimate consumer. The transparency improves compliance as it
becomes difficult to evade taxes successfully at every transaction stage.
Cross-checking of tax credit taken earlier can make it difficult to avoid
payment. After deducting the tax credit, the tax payable is a small
amount at any point of time. In conventional taxes, there is ample scope
for evasion as the documentary requirements are not as elaborate and
inter-related as in VAT.
More Revenue
The immediate objective of VAT in developing countries is to
improve the tax to GDP ratio. It is adopted when conventional taxes fail
to provide elastic revenue for meeting the increasing demands of public
expenditure. In all VAT operating countries, it has earned the reputation
of being a dependable revenue raising instrument. VAT can easily access
the incremental income generated by the expanding economic activities
without altering the rates or base in every budget. When VAT was
introduced, it yielded more revenue than the initial estimates in countries
like New Zealand, Portugal, Korea and Indonesia. The average revenue
contribution of VAT ranges from 5 to 10 % of GNP depending on the rates
and requirements. That should allay the apprehensions of the Indian
states that they are about to lose considerable revenue.
Several studies conducted in European countries indicate that
revenue from VAT increased steadily since its inception. In developing
countries like Korea, Indonesia and Chile, the first three years after its
inception showed substantial increase in the tax ratio. The substantial rise
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of revenue in these countries has been attributed to better tax compliance
and reduced scope for evasion. The revenue is also closely related to the
cost of collection and compliance. In the initial stages, VAT is definitely
more costly to administer than other conventional taxes for its
requirements of infrastructure and detailed documentation. The
administration also has to invest heavily on automation to deal with the
scrutiny of returns and matching of invoices. But once the infrastructure
is provided, the cost of collection and compliance gradually declines.
The very low cost of collection of conventional taxes only reflect the
inability of the administration to tap the vast potential for revenue. The
British experience shows that operating cost of VAT came down from 2 %
to 1 percent in less than 10 years time. If the VAT rates were low, it
would not be economical to incur the cost of maintaining a huge
establishment for revenue collection and tax payment. It has been
estimated that any rate below 7 % would not be worthwhile for
developing countries contemplating the adoption of VAT. A basic rate of
10 % is the minimum that is required for implementing a manufacturers'
VAT of the type that was adopted in Indonesia and Columbia.
More important than the cost of collection is the compliance cost of
the taxpayer. For compliance at the retail level, details of daily
transactions in exempted goods, taxable goods, and tax credits on
purchases are to be maintained even by very small establishments. Every
sale will involve the issue of a proper invoice indicating the tax in the
price. If the literacy rate is low, such requirements lead to serious
problems of documentation. Many retailers and wholesalers may have, to
hire help for maintaining accounts, which increases the overheads, since
the margins available for retail and wholesale transactions are not much,
the burden of VAT may become unbearable for small enterprises. But the
alternative is to continue overtaxing a narrow base repeatedly by different
agencies. It is difficult to raise revenue properly unless taxpayers make
some sacrifices in the initial stages.
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Price Neutral
Equity Ensured
Policy makers are worried lot when it comes to the distributional
impact of tax burden. Incidence studies try to estimate the distribution of
tax burden across various income groups for indicating whether the tax is
collected according to the capacity of the payer. To reduce the regressive
impact of commodity taxes, VAT rate has to be less than that of the
substituted taxes like central excise or sales tax. Some empirical
conclusions on the distribution of VAT burden indicate that its overall
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impact is marginally progressive. VAT has been found progressive in the
UK in view of zero rating of essential consumption articles.
The progressive effect of VAT is visible in countries that totally
exempt essential consumer articles like food and medicine. But the
comfortable fact is that its incidence is generally less regressive than that
of other commodity taxes. In comparison to conventional indirect taxes,
VAT can be more equitable by exempting articles of essential
consumption. The tax policies will have to be adjusted to the
requirements of the country having regard to the existing patterns of
distribution of income in the population.
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differential rates for improving economic efficiency. Moreover, economic
efficiency cannot be measured only in terms of tax revenue.
Tax evasion
It is well-known that conventional commodity taxes are highly
prone to evasion. If luxury consumption is heavily penalized with
deterrent rates, evasion and corruption become uncontrollable. The
cascading effect of conventional commodity taxes and the delays involved
in detection and litigation makes it easy and profitable to get away with
tax-related crimes. Even law-abiding citizens and firms are tempted to try
their luck in making a fast buck through evasion. Successful events of tax
evasion attract many followers who attempt to replicate them with more
ingenious methods. They call evasion euphemistically as "legal
avoidance". The evaders not only escape payment of commodity taxes
with impunity, but avoid all kinds of taxes related to the chosen base. The
honest taxpayers who bear a heavy burden ultimately perish in
competition with the powerful evaders. With the adoption of VAT, the
evasion scenario undergoes a drastic transformation.
Consumption type of VAT with tax credit method of collection does
not give much scope for evasion. Evader cannot escape detection with the
thorough auditing of invoices unless all transactions uniformly reflect
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lower value addition. The clear possibility of discovery at one stage or
other is a deterrent for habitual offenders who may find it difficult to pay
heavy fines and penalties. The evaders are not likely to be benefited
individually, as large amount of tax does not get collected at any stage of
transaction. With rigorous auditing of documents, chances of detection
can be further increased. In conventional taxes, audit is confined to
manual, data checking, but VAT uses the speedy electronic medium for
matching of invoices. VAT operating countries have lower non-matching
ratio of sales invoices than that of purchase invoices. This indicates the
trend to fully utilize tax credit on purchases. In many countries, errors
and non-matching ratios have considerably fallen after the introduction of
VAT.
One major worry on the evasion front is that computerized checks
cannot easily capture cases of fictitious tax credit using forged invoices.
Even the most ingenious tax administration will have to learn how to cope
with problems of forgery particularly when the trust imposed on the
taxpayer is abused. They have to be fully alert to such new methods of
evasion. Unscrupulous elements in trade and industry are always on the
look out for fresh pastures to make more black money at any risk. To deal
with them, VAT will have to be equipped with more stringent deterrents
like black listing and deregistration.
Economic growth
As indicated elsewhere, in the first two decades of the post war
period, policy makers all over the world reasoned to massive rate changes
and base expansion for resource mobilization. Tax incentives were
lavishly given ostensibly for promoting savings and investment. But after
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an initial spun in economic activities, the growth became stagnant due to
inefficiencies arising from wrong policies and practices. It was realized
later that the cause of economic growth can be served better if the tax
system was left undisturbed to pursue its primary objective of revenue. A
heavy lax burden restricts growth while lower taxes not only promote
savings but also ensure better revenue and improved compliance- In fact,
indirect taxes do not have any direct bearing on the incremental saving
ratio like the taxes on income.
The increasing mobility of capital and the emerging E-commerce
necessitate lowering of rates of income and corporate taxes. Tax reforms
for achieving higher growth rates will have to aim at improving the
domestic after-tax rate of return to capital as compared to that of
neighboring countries. Tax rates will have to be attractive and its
administration should be transparent enough to prevent migration of
capital and improve FDI. Luxury consumption is always taxed at high
rates in many developing countries on the assumption that saving ratios
can be improved. But a heavy tax burden imposed on luxury articles
generally leads to distortions in the choice of the producers and
consumers. It also provides an incentive for evasion. A uniform VAT is
preferable to differential rates as it allows uninterrupted flow of economic
activities. In fact, VAT can definitely achieve faster economic growth
unlike other indirect taxes.
We have seen some of the positive features of VAT that made it an
acceptable alternative even to the ubiquitous income tax. Now let us
proceed to the actual Indian experience of a watered down version of
VAT. MODVAT was introduced in 1986 and it evolved into a full fledged
CENVAT in 2000. The transition from a crude form of VAT to a highly
evolved tax instrument is an interesting episode in our economic growth.
It can guide the states in their choice of a suitable VAT variant. The model
of CENVAT and its institutions are worthy of emulation by the slates to
avoid possible pit falls in the implementation of VAT in 2003.
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General perception of people (As per the field study)
This is not correct. First of all, VAT is introduced in place of other kinds of
indirect tax such as excise duty, turnover tax, surcharge on sales tax,
additional surcharge and special additional tax which would be removed
completely. Consider this example:
This shows that with VAT the tax payable by an individual will reduce to a
greater extent.
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As seen in examples the prices should actually fall down. But in the first
few months of introduction of VAT there might be a little rise in prices due
to misconceptions and confusions. It is also correct that the products
which were earlier taxed at 10% will now be taxed at 12.5%. At the same
time the products which were charged between 15 to 20% will now be
charged at only 12.5%. It is not necessary that the sellers will charge VAT
on all products to the customers. It depends on the demand elasticity of
the product. So if we see the overall effect in the market there will be no
rise in the price of products of markets.
People think that due to new rules of VAT, there will be corruption by
Government officials as in payment of VAT, refund etc.
Here, what will happen is that it will reduce black money because all the
people will buy articles with bill and the shopkeeper will have to file the
returns. Everything will come on paper. As such to get the refund one will
have to file the returns. So everything will be legalized. It is good as the
black money will reduce and official money will run in the market. If this
happens the country will record a huge amount of rise in GDP in the very
first year.
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Conclusion
If Government implements VAT of course, the benefits will go to the
country’s wealth. As to summarize VAT, when a product is introduced in
the market, the payment of tax starts from the manufacturing side. First,
the manufacturing company will deposit some VAT for buying the raw
materials. This amount will return to them when they submit audit. The
main thing is that the deposited money (VAT) which the company gives
will work like a capital amount for the Government. Although a product
when it comes in the consumer’s hand, all the VAT amount must be paid
by the consumer. The mediators are just rotating VAT for the customers.
Suppose if a customer buys a TV, he needs to pay the VAT which is at
specified rate. Here the VAT amount will not be returned to the customer
from any side. If it is a company, they can claim this VAT amount paid for
buying raw materials or other expenses. So here the amount works like a
refund when it comes to audit. So if VAT is implemented each consumer
should pay an amount as a tax to Government for the products purchased
by them. It thus benefits the country’s economy.
Till now only consumers are paying tax on all products. The impact of tax
is on the manufacturer, but the burden is on the consumers. The
wholesalers and the vendors are eating the cream. Even the salaried class
and manufacturing sector is paying tax. The vendors and the wholesalers
are almost exempted from this tax. The Government should implement
VAT as soon a possible.
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