Financial Daily from THE HINDU group of publications
Tuesday, Jul 29, 2003
Financial Daily from THE HINDU group of publications Tuesday, Jul 29, 2003 |
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Opinion
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Letters VAT and its effects
In this ever-changing and globalised world, accurate and timely information is the key to business decisions. Any change in the tax regime or a new system of tax can have an impact on business transactions and costs, and, therefore, on business decisions. India took a major initiative with the Value Added Sales Tax Bill, 2003.VAT is a concept which first gained prominence in France in 1954 and is at present adopted by many countries. Sales tax and other related taxes would gradually be phased out after the implementation of VAT. Also, VAT will reduce the taxpayer's need to visit tax offices. It will increase competition in exports as the tax rate on exports will be 0 per cent and yet credit will be given on tax paid on inputs. It will benefit consumers and not lead to price rise as there will be no double taxation. There are only four rates of tax under VAT compared to the numerous under sales tax. So disputes relating to classification of goods, a main source of litigation today, will practically disappear.
Manwinder Arora Delhi
Letters to the editor and contributions can be sent by e-mail to: bleditor@thehindu.co.in
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